BUZZ-Analysts turn more bearish on big oil, talk dividend cuts

** No "buy" on European big oils: Kepler Cheuvreux cuts remaining "buy" ratings under its coverage and revises down its long-term oil price expectations to $50/bbl from $60/bbl

** Kepler cuts BP to "reduce" from "hold", Total (LSE: 524773.L - news) , Shell (LSE: RDSB.L - news) , Eni (LSE: 0N9S.L - news) and Repsol (Amsterdam: RP6.AS - news) to "hold"

** "The US rig count has already crossed the red line... The whole sector is in for a rude awakening once it realises the full extent of US shale's disruptive impact," Kepler says

** Analysts say there is a possibility that US shale production will grow >1 mln bpd in 2018 with US E&Ps outspending their cashflows in the Permian basin as they would need no more than $50/bbl

** In the Permian Basin - the largest U.S. oilfield - companies like Parsley Energy (Frankfurt: A112QR - news) , Diamondback Energy (Frankfurt: A1J6Y4 - news) and others are pumping at the fastest rate in yrs

** Morgan Stanley (Xetra: 885836 - news) and Kepler discuss how one of the worst oil price downturns could prompt big oil cos to cut dividends

** MS says "this downturn is deeper and longer than any previous down-cycle since the early 1970s" and believes dividend cuts will come after credit rating downgrades

** Crude's current downturn cycle has underperformed every previous downturn

** OPEC/Non-OPEC production cuts with global upstream capex slashing by half has not helped oil price recover after slumping over 60% from 2014 peak

** MS believes dividends are safe in 2017, 2018 and risks build in 2019/20

** While, Kepler says "we do not anticipate the dividends (without scrip) to be covered before the end of the decade. This brings up once again the question of the sustainability of current generous shareholder returns"