HOUSE_OVERSIGHT_016146.jpg
1.15 MB
Extraction Summary
2
People
7
Organizations
2
Locations
1
Events
1
Relationships
3
Quotes
Document Information
Type:
Financial research report / market analysis
File Size:
1.15 MB
Summary
This document is page 36 of 'GEMs Paper #26' published by Merrill Lynch on June 30, 2016. It contains a commodities analysis authored by Francisco Blanch and Peter Helles focusing on the Saudi National Transformation Plan (NTP) and predicting oil market tightness with prices averaging $55-75/bbl through 2020. The document bears a 'HOUSE_OVERSIGHT_016146' Bates stamp, indicating it was part of materials reviewed by the House Oversight Committee.
People (2)
| Name | Role | Context |
|---|---|---|
| Francisco Blanch | Author/Analyst |
Commodities analyst for MLPF&S, listed with email address.
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| Peter Helles | Author/Analyst |
Analyst for MLI (UK), listed with email address.
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Organizations (7)
| Name | Type | Context |
|---|---|---|
| Merrill Lynch |
Financial institution publishing the report.
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| BofA Merrill Lynch Global Research |
Source credited for the chart data.
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| MLPF&S |
Merrill Lynch, Pierce, Fenner & Smith (employer of Francisco Blanch).
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| MLI (UK) |
Merrill Lynch International (employer of Peter Helles).
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| Bloomberg |
Source for chart data.
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| OPEC |
Oil cartel mentioned in market analysis.
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| House Oversight Committee |
Implied by the Bates stamp 'HOUSE_OVERSIGHT_016146'.
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Timeline (1 events)
Locations (2)
| Location | Context |
|---|---|
|
Primary focus of the analysis regarding the National Transformation Plan (NTP).
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Location associated with Peter Helles.
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Relationships (1)
Both listed as authors on the Merrill Lynch report.
Key Quotes (3)
"The Saudi National Transformation Plan (NTP) suggestion that production capacity is to be maintained at the current level until 2020 reinforces our conviction of medium-term oil market tightness."Source
HOUSE_OVERSIGHT_016146.jpg
Quote #1
"We see oil averaging US$55-75/bbl over 2016-2020"Source
HOUSE_OVERSIGHT_016146.jpg
Quote #2
"We think it likely that Saudi will dig into its untested spare capacity to go for increased market share, though uncertainty over how much Saudi can and will produce remains."Source
HOUSE_OVERSIGHT_016146.jpg
Quote #3
Full Extracted Text
Complete text extracted from the document (1,869 characters)
Exhibit 2: Saudi credit risk prices in rating downgrades
[Chart with Y-axis 0-1000 and X-axis AA to CCC rating categories. Data points labeled with country codes: IQ, NG, EG, LB, JA, BH, BR, JO, SE, HR, MO, HU, RO, DU, CO, PO, LA, LI, SL, IS, KSA, QA, AD]
Source: Bloomberg BofA Merrill Lynch Global Research.
[Chart with Y-axis 0-1000 and X-axis AA to CCC rating categories. Data points labeled with country codes: IQ, NG, EG, LB, JA, BH, BR, JO, SE, HR, MO, HU, RO, DU, CO, PO, LA, LI, SL, IS, KSA, QA, AD]
Source: Bloomberg BofA Merrill Lynch Global Research.
Commodities: NTP adds to medium-term oil market tightness
Francisco Blanch
MLPF&S
francisco.blanch@baml.com
MLPF&S
francisco.blanch@baml.com
Peter Helles
MLI (UK)
peter.helles@baml.com
MLI (UK)
peter.helles@baml.com
The Saudi National Transformation Plan (NTP) suggestion that production capacity is to be maintained at the current level until 2020 reinforces our conviction of medium-term oil market tightness. We continue to see a call on OPEC of 4.1mn bpd in the next five years to "balance the market", and see oil prices of US$55-75/bbl over 2016-2020. Although the NTP incorporates a target of boosting domestic gas production by 50% to 18 bcf/d by 2020 which could crowd out oil demand, we expect Saudi Arabia’s ability to switch to reduce oil burn in power generation to 2020 to be quite limited, in our view.
We see oil averaging US$55-75/bbl over 2016-2020
Real Brent prices are at one of the lowest levels in decades, and will likely encourage very strong demand growth ahead, while we see supply falling across non-cartelized producers. As such, we see global light sweet crude oil averaging US$55 to US$75/bbl over the 2016-2020 period, depending on how much incremental production OPEC can and will supply over the next five years. We think it likely that Saudi will dig into its untested spare capacity to go for increased market share, though uncertainty over how much Saudi can and will produce remains. We also remain concerned about output sustainability among weaker cartel members given the rapid credit profile deterioration.
Real Brent prices are at one of the lowest levels in decades, and will likely encourage very strong demand growth ahead, while we see supply falling across non-cartelized producers. As such, we see global light sweet crude oil averaging US$55 to US$75/bbl over the 2016-2020 period, depending on how much incremental production OPEC can and will supply over the next five years. We think it likely that Saudi will dig into its untested spare capacity to go for increased market share, though uncertainty over how much Saudi can and will produce remains. We also remain concerned about output sustainability among weaker cartel members given the rapid credit profile deterioration.
36 GEMs Paper #26 | 30 June 2016
Merrill Lynch
HOUSE_OVERSIGHT_016146
Merrill Lynch
HOUSE_OVERSIGHT_016146
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