Morningstar: Outlook bleak for oil in 2016

Morningstar analysts said on Tuesday that they believe the oil glut and low prices are likely to last at least through next year, according to Fuel Fix.

The analysts commented that, despite declining US oil production over the next several quarters, global oversupply will not be reduced quickly enough to improve current imbalances. Therefore, they expect an extended downturn that will possibly last through 2016.

Morningstar also predicts that near-term prices will remain low due to OPEC’s decision to maintain its current production levels.

The analysts concluded that these factors will combine to continue the pain into 2016 for stock prices and drilling budgets across the energy sector.

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