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UBS Cuts Brent Forecast On Mild Winter, Russian Output

OIL

UBS revised down its Bren oil price forecast for this year because of a mild winter in the Northern Hemisphere which weighed on gas-to-oil switching, especially in Europe, the bank said in a note.

  • The bank cut the End-June price by $10/bbl to $100/bbl.
  • End-September and end-December has been revised down by $5/bbl to $105/bbl.
  • The bank also reduced its downside for Russian oil production, now looking for output to stabilize slightly above 9mbpd, compared with a previous estimate of below 9mbpd.
  • Together with resilient Russian production, that’s translated into a less-tight oil market.
  • Morgan Stanley also cut its Brent oil forecast for the second half of this year to $90-100/bbl, from $100-110/bbl previously.

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