Wells Fargo Calls $100 Oil a 'Pipe Dream'

 

The report quoted Wells Fargo’s John LaForge saying that he’s doesn’t expect oil prices to climb anywhere near $100 a barrel over the next few years.

 

Barrels price will bounce between $30 and $60 in the coming years, according to top bank’s diagnosis.

 

At the $40-$50 price range, crude prices will likely crater, LeForge said, “but [oil producers] are having a hard time restraining themselves from producing.”

 

“We continue to hear that big cutbacks are on the cusp of happening,” he said. “The evidence, however, implies otherwise. And the longer oil prices remain low and range-bound, the harder it will be for prices to bounced above $60—as production costs have dropped significantly since 2014, which keeps more producers in the game.”

 

Shale production has caused American output to stand higher than it did in 2014, before the oil price crisis began. Wells Fargo data shows current production at 15.5 million barrels per day, compared to 14 million bpd three years ago.

 

An $80 ceiling is also likely unattainable, LaForge said, “until the world’s oil producers stop overproducing.”