Factbox - Analysts' reactions on OPEC decision

(Reuters) - Oil analysts are taking stock of Thursday's OPEC meeting which decided against production cuts despite a huge oversupply in world markets. Brent crude oil plunged as much as $6.50 a barrel on Thursday, and U.S. crude fell by nearly as much, posting the steepest one-day falls since 2011. BNP Paribas Date: Nov. 28 Call: OPEC's decision to maintain its production entrenches a surplus in the oil supply/demand balances "It also implies that OPEC is forfeiting its role as swing supplier, leaving the invisible hand of the market to adjust balances through price changes." "As a result of the now entrenched oil supply surplus, we have revised down our crude oil price forecasts. We now forecast Brent averaging $100 per barrel in 2014 and $77 a barrel in 2015. We see WTI averaging $94 per bbl in 2014 and $70 a barrel in 2015." Goldman Sachs Date: Nov. 27 Call: Expects U.S. production growth will slow and that OPEC will implement moderate production cuts once this slowdown is apparent "OPEC's decision came in line with our expectation and our view that it is not in OPEC's interest to balance the market on its own but that U.S. shale oil production should contribute as well, given its scalability." "While we continue to believe that WTI prices in a $70-$75 per barrel range are sufficient to incentivise U.S. producers to reduce capex, today's price sell-off creates potential for further declines in oil prices." "We reiterate our 2015 price forecast with Brent prices at $80-$85/bbl and WTI at $70-75/bbl." "We believe another large leg lower in Brent oil prices to near $60 a barrel would not be sustainable beyond a few months (absent significant demand weakness) as it would accelerate the rebalancing of the oil market with Canadian oil sands and U.S. shale oil projects reaching their production variable costs." Deutsche Bank Date: Nov. 27 Call: OPEC likely takes a long view to sustaining consumer demand "OPEC likely takes a long view to sustaining consumer demandnot only through increasing affordability and contributing to economic growth, but also reducing the attractiveness of substitutes." "In our view today's decision throws the market balance into crisis most acutely in H1-2015 when seasonal demand is weak, and perhaps before U.S. tight oil producers have had a chance to make any major adjustment to activity levels. We estimate that sustained pricing at $60/bbl WTI is the level which would trigger a material shift in the trajectory of U.S. production growth." HSBC Date Nov. 28 Call: Not wholly good news as it will add to disinflationary pressures; The net effect should be positive for equities, but some emerging market currencies and U.S. high-yield credit are vulnerable "We think sentiment (and prices) could bottom fairly rapidly if we start to see signs of the market adjusting – notably in falling US drilling activity or rising demand estimates." "The near-term impact of lower oil prices is likely to be varied. Clearly, oil producers will suffer and oil importers benefit. However, we caution against getting too carried awaywith the good news that comes with lower oil prices. At least inpart, falling oil prices represent an ongoing deficiency inglobal demand which is manifesting itself in disinflationarypressures not just in commodity prices, but also wages." Morgan Stanley Date: Nov. 27 Call: Oil will enter a new paradigm where prices are subject to the swings of normal commodity cycles with much higher volatility (if such a strategy turns permanent) "Lower prices are bad for the entire oil complex ... 2015 capital budgets are still in the process of formation, and capex is likely to be cut further from both U.S. and global players. High cost international projects could face more pressure. The resulting slower U.S. growth also lowers the risk of any material widening of U.S. differentials." Standard Chartered Date: Nov. 27 Call: Price pressure is likely to become so strong that OPEC is very likely to hold another meeting before June "At least one quarter of chaos is likely to ensue, with the cash constraints on the industry tightening significantly. Next time around, OPEC is likely to have to cut more aggressively than it needed to at the latest meeting, given the deep market scepticism that is likely to surround the announcement of any emergency meeting." Lowers 2015 Brent average forecast to $85/bbl from $101 previously and 2015 NYMEX WTI average forecast to $81/bbl from $95 earlier DNB Date: Nov. 27 Call: Strong signal that the market will be left to itself "The bottom line from the meeting is that it came out as bearish as it was possible. No change in the production target and no focus on compliance. Now everyone will know that it will be up to the U.S. oil producers to balance the market into 2015 through lower activity. We expect large cuts in CAPEX for both onshore and offshore oil producers into 2015." "Based on the above we will have to revise our already very weak supply-demand balance to become even weaker into the first half of 2015. Saudi will probably cut production of crude somewhat during the coming couple of months due to the seasonal drop in its domestic demand but this will have nothing to do with price management." Expects large cuts in CAPEX for both onshore and offshore oil producers into 2015 Societe Generale Date: Nov. 27 Call: Saudi Arabia and OPEC will no longer be the mechanism to balance the market from the supply side "Today's decision means that Saudi Arabia and OPEC will no longer be the mechanism to balance the market from the supply side. They have relinquished that role. Instead, the market itself - prices, in other words - will be the mechanism to rebalance the market." Lowers average forecasts to $70/bbl from $90/bbl for Brent and $65/bbl for Nymex WTI ($82/bbl and $81/bbl for 2015 and 2016 respectively earlier) for the next two years Capital Economics Date: Nov. 27 Call: OPEC appears resigned to making the best of a bad job, at least for the time being "The cartel may have come to the conclusion that a period of lower oil prices could potentially work in the groups' favourover the longer term, given the boost it should provide to the global economy and hence to demand." "The cartel is faced with a set of similar decisions at its next scheduled meeting in June. What's more, there is a realistic chance that by the time of OPEC's next meeting there will have been some sort of agreement in principle between Washington and Tehran on the latter's nuclear programme. This could open the door for a surge in oil exports from Iran, making an agreement on any cut even more difficult." Expects oil prices to remain low (end-2016 forecast for Brent is $70 per barrel) Barclays Date: Nov. 27 Call: OPEC puts the onus on other producers, especially the United States, to adjust as well "In keeping the production target at 30 mb/d, OPEC is clearly signalling that it will no longer bear the burden of market adjustment alone and this decision puts the onus on other producers, especially U.S. tight oil to adjust as well." "The call-on-OPEC crude and stocks based on our market balances for Q4 is only 29.6 mb/d, suggesting that oil inventories will continue to build in Q4. But the real problem will come next year when our balances show the call-on-OPEC crude is placed at 28.5 mb/d, owing partly to 1.49 mb/d of non-OPEC supply growth scheduled for next year. In Q2, the call on OPEC crude could fall below 28m b/d if no other supply cuts are forthcoming." Expects price levels to drop below $70/bbl for Brent and even lower for WTI in the short term OCBC Bank Date: Nov. 28 Call: The cartel has been more concerned over preserving market share, rather than lifting oil prices "OPEC's unchanged 30 million barrels per day (mbpd) production limit does suggest its concern over preserving market share, rather than a possible futile attempt in lifting oil prices giving rising oil supply from the U.S. shale oil production. ... The cartel views the over-supply isn't by their hands, and should we infer, likely caused by high U.S. oil production given its shale production." "With the current low oil price, it is then vital to watch what the shale producers will do for the rest of 2014, and in the coming year. Needless to say, should shale oil production cost be indeed at $70 - $77/bbl, shale oil producers' profit margin are likely squeezed significantly, and future production cues may see downside pressure given current oil price lows." (Reporting by Vijaykumar Vedala and Arpan Varghese in Bangalore; Editing by Jonathan Oatis)