J.P. Morgan seems to be firmly on the ground in terms of oil and its future.
"Improvements in the performance of the largest producer countries in the world, along with rising shale yields in the United States, will return prices close to $ 50 a barrel, this time we do not offer a forecast, but we say that will happen, just wait" say analysts at JP Morgan's commodity department.
According to Christian Malek, Break Even Point (the level where companies cover their full costs) for OPEC countries is $ 60. US pressure and better technologies that allow lower Break Even will lower the price below $ 60. Not long after, we will also see the complete failure of the agreement between the member states of the organization.
Why?
Because the treasuries of most of the countries are withering at the moment, mainly because of the reduced yield. A price of less than $ 60 will force them to step out of the deal and focus on increasing production, and this will lead to domino effect. In this case the direction is one and it is down.
Source: Bloomberg Pro Terminal
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