Thursday 23 September 2021

Brent to average $70 in 2018: BofAML

DUBAI, June 25, 2018

While Brent crude oil price forecast for 2018 remains at $70 per barrel (/bbl), it is expected to touch $90/bbl in the second quarter of 2019 due to a tight balance throughout next year, said the Bank of America Merrill Lynch (BofAML) in a new report.

The Trump administration is likely advantage of any dip in oil prices to put additional pressure on Tehran, likely reducing downside risks to oil prices in the absence of a full blown trade war, added BofAML’s latest Global Energy Weekly.

Near-term, the agreement will also likely flatten Brent term structure of crude oil a bit and, in doing so, could also force a slightly narrower Brent-WTI spread in the third quarter of 2018, according to the report.

A group of 24 Opec and non-Opec oil producing countries representing over half of total global oil supplies met in Vienna this week to discuss the state of the oil market and determine whether additional barrels were needed to balance it over the coming months.

Opec has expressed an intention to boost output to reach 100 per cent compliance with its target output. Based on May production data, this entails an increase of roughly 700 kb/d (thousand barrels per day). Additionally, representatives from several member countries cited an aggregate Opec/non-Opec increase of 1 mb/d (million barrels per day), which would likely mean a 300 kb/d increase from Russia, though final details for non-Opec production are scheduled to be released on Saturday.

“This aggregate increase differs somewhat from our expectation last week of 1.2mn b/d, but importantly Opec is opting to put more oil in the market in 2H18,” BofAML said in the report. – TradeArabia News Service

Tags: Opec | oil price | Vienna | Brent Crude | 2018 |

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