Oil price rebound likely by ’15 end on lower shale output

A rebound in oil prices is expected later in 2015 once the current oil glut is reduced through lower oil shale production, QNB has said in its “Global markets update” quoting some commentators.
Oil prices fell further as Saudi Arabia indicated an unchanged oil production policy following the passing away of King Abdullah.
Commodity prices were generally lower, except for precious metals on hedging bets against global deflation, most commentators expect commodity prices to continue to weaken on deflationary risks and once US short-term interest rates start rising, QNB said.
On key takeaways, QNB said the dollar strengthened on the European Central Bank (ECB) announcement of a scaled-up €60bn a month open-ended Quantitative Easing (QE) plan.
Euro has fallen to a new eleven-year low against the dollar following the ECB QE announcement.
The ECB QE announcement, QNB said was higher than market expectations in terms of size, pace and duration.
Euro is forecast to weaken further against the dollar going forward, unless the Eurozone economy recovers.
“Most commentators expect dollar to strengthen further going forward on expectations of higher US short-term interest rates in 2015,” QNB said.
Global bond yields were mainly lower on the ECB QE plan, which includes the purchase of Eurozone sovereign debt.
German and Japanese sovereign bond yields fell to new historical lows as investors continue to hedge against deflation. Long-term German and Japanese sovereign bond yields are expected to fall further, following the ECB announcement
 “Most commentators expect yields to rise in emerging markets (EMs) as the date of the first US interest rate hike approaches,” QNB said.
Global equities rallied on the ECB announcement as well as stronger than expected global PMI data.
Most commentators expect G20 equity markets to level off at lower valuations once US short-term interest rates start to rise, it said.
Equity markets were broadly highly in QNB Group countries in line with global equities.
Most commentators expect equity markets in QNB countries to stabilise, although the security situation and lower oil prices in some countries presents considerable risks, QNB said.