Macro oils short-term outlook: September 2017 oil price forecast
Hurricane Harvey slammed the US Gulf Coast on 25 August hitting US production, refining capacity and demand. The impact was initially bearish for WTI with a peak of 4.5 million b/d of refining capacity shut down. In early September, both Brent and WTI have strengthened on reports OPEC and Russia are considering an extension of the production cut agreement beyond the current period to end-Q1 2018. The OPEC rumours do not have a material impact on our 2018 forecast because we have been assuming OPEC would extend the deal through 2018 since July. If the OPEC production deal were not extended beyond Q1 2018, prices would drop much further in 2018 than in our base case view for Brent to average $50 per barrel in 2018.