Guinness' Waghorn: Two bull and bear scenarios for oil in 2016

History shows oil prices bottom when the market starts to rebalance and when oil inventories stop growing; but when will this happen?

If we are being bullish: we will see continued strong oil demand through 2016 as a result of low gasoline prices across the world. Personal (not industrial) consumption is key to demand growth of 1.2 million barrels per day in 2016, after 1.8 million barrels per day of growth in 2015. US production declines continue through 2016 as a result of a precipitous fall in US oil-directed drilling activity (now only 400 rigs drilling for oil versus over 1,600 at peak). OPEC hold flat (although Iran adds 400,000 barrels per day), and the remainder of the world oil production starts to fall fro...