In a disappointing year for oil investors, Wells Fargo Senior analyst Roger Read still sees steady demand ahead for oil but has lowered his price deck through mid-2018. “Whether in actual terms or relative to expectations, sub-$50/bbl oil has confounded OPEC, the futures market and the vast majority of prognosticators (including us),” Read said. Read noted how while this used to be the standard in a commodity market, “Today, determining the true marginal cost of incremental crude oil supply is complicated by a significant portion of current and near-term future supply additions that were green-lighted when oil exceeded $100/bbl.” Zerocost supply from Nigeria and Libya and rapid shale production growth have also contributed the fall in oil prices. According to Read, “Essentially, the market is trying to force shale and longer-term additions to slow down because the other major additions are price-agnostic.” Read expects change to occur over the next few years, as he estimated the non-OPEC mega project additionally will fall by about 50 percent. This should create a call for new supplies, and help oil prices recover.Source