Source: EnerCom, Inc. Data: Bloomberg

Source: EnerCom, Inc. Data: Bloomberg

The price of West Texas Intermediate (WTI) crude has taken the oil and gas industry for a wild ride since June. From north of $105, so far we’ve rocketed down the first hill of the rollercoaster and we’re still screaming with our eyes closed.

But if you go by the published WTI price forecasts of 32 large banks, crude is about to bottom out. The bank estimates, supplied by Bloomberg, cover the banks’ average price forecasts on a quarterly basis. Individual estimates can be seen in the table below.

Of the 32 banks, only five have an average Q1’15 estimate below the $45.00 threshold. Already today, WTI has traded between $46.92 and $51.27 and it’s just prior to lunch time.  That may be the 2015 definition of volatility. For the quarter we’re in, 14 banks have set their estimates above the $60.00 mark. According to all of the banks, the price is expected to consistently rise throughout 2015, and nobody has oil in the $40’s by Q3’15. Nine expect WTI to climb back into the $90’s range by the fourth quarter. Following the trend line, the midpoint of the spot price is projected to pass the $80/barrel mark by year-end.

WTI prices have experienced a slight relief in recent trading. Yesterday WTI traded higher than Brent for the first time since July 2013, but Brent has since established its dominant position, and at this moment Brent, at $48.99, is trading at a $1.81 premium to WTI. The majority of analysts are predicting a Brent-weighted differential of roughly $5 in their near-term forecasts, indicating how closely the two will be linked in the revamped market. The average spread on a trailing twelve months basis was nearly $9.

Firm Q1 15 Q2 15 Q3 15 Q4 15
Nomura International Hong Kong Ltd 40.00 50.00 60.00 70.00
Itau Unibanco Holding SA 47.00 51.30 56.60 64.70
Raiffeisen Bank International AG 47.00 51.00 57.00 64.00
DZ Bank AG Deutsche Zentral- 50.00 57.50 65.00 75.00
Santander UK PLC 47.19 47.19 50.00 55.62
Norddeutsche Landesbank Girozentrale 48.00 53.00 61.00 73.00
LBBW 45.00 50.00 55.00 60.00
Intesa Sanpaolo SpA 45.00 53.00 58.00 62.00
Societe Generale SA 42.00 47.00 56.00 60.00
Deutsche Bank AG 52.50 52.50 55.00 57.50
BNP Paribas SA 50.00 48.00 58.00 62.00
Bank of America Merrill Lynch 64.00 68.00 74.00 82.00
Commerzbank AG 41.00 52.00 62.00 72.00
Citigroup Inc 52.00 47.00 58.00 61.00
Prestige Economics LLC 50.00 58.00 65.00 72.00
RBC Capital Markets 58.00 62.25 67.30 72.28
Danske Bank A/S 54.00 58.00 66.00 74.00
Oversea-Chinese Banking Corp Ltd 60.00 65.00 70.00 75.00
Capital Economics Ltd 61.00 62.00 63.00 65.00
Natixis SA 55.00 60.00 70.00 75.00
CIBC World Markets Corp 58.00 67.00 82.00 85.00
Incrementum AG 68.00 71.00 74.00 80.00
Lloyds Bank PLC 69.00 72.00 79.00 82.00
Westpac Banking Corp 68.00 67.00 69.00 80.00
National Australia Bank Ltd 72.00 75.00 80.00 82.00
Standard Chartered Bank 64.00 78.00 89.00 93.00
UniCredit Markets & Investment Banking 66.00 66.00 76.00 76.00
Toronto-Dominion Bank/Toronto 65.00 68.00 70.00 75.00
Australia & New Zealand Banking Group Lt 63.50 66.30 68.80 71.50
Jefferies LLC 64.00 65.00 69.00 72.00
Macquarie Capital USA Inc 65.00 61.00 67.00 81.00
Barclays PLC 78.00 80.00 91.00 91.00

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