Brent production forecasts revised

Expansionary production policy pursued by Saudi Arabia and record-high oil production in Iraq caused the oil marketto be oversupplied significantly. In addition, there is the prospect of additional oil from Iran. The probability of sanctions being eased or lifted next year has increased given that US President Obama managed this week to garner sufficient support in the US Senate to approve the nuclear deal, meaning that the Senate can no longer overrule any presidential veto of the deal being rejected. 

"Since it will take considerably longer to reduce the oversupply than previously anticipated, we are lowering our oil price forecast for the period to the end of 2016 by $10 and now expect to see Brent priced at $55 per barrel by year's end. Declining non-OPEC supply next year should drive up the call on OPEC significantly, meaning that the oversupply will decrease noticeably. As a result, Brent should rise to $65 per barrel by the end of 2016", states Commerzbank.