OIL: UPSIDE IS LIMITED TO $120 IN THE LONG RUN – NORDEA

This week, Crude Brent Oil reached a peak of 97$/barrel before coming down to the 95$ area. Economists at Nordea analyze Oil’s outlook.

A further rise to the $120 area cannot be ruled out

The tightening of crude storages has supported the Oil price rally and we believe that Oil prices will swing around the current levels around $90-$100.

A further rise (to the $120 area) cannot be ruled out if OPEC keeps the Oil flow low(er).

If OPEC pushes Oil prices too high, US shale will respond and could take more market share, which would be counterproductive for OPEC in the longer run. As such, we believe that the upside in Oil prices is limited to $120 in the long run.