Jadwa Investment has revised up its Brent crude oil price forecast by 7.14 percent to average $60 per barrel (bbl) in 2018, from its previous estimate of $56/bbl.
The revision comes despite the research firm expecting downward risks to prices, due to expanding US shale output and a "possible exit” of OPEC and non-OPEC members from the output cut deal, it said in a recent report.
“Whilst OPEC and some non-OPEC producers agreed to extending cuts until the end of 2018, a decision to exit cuts could take place sooner,” Jadwa said.
Last week, US Energy Information Administration (EIA) revised up its North Sea Brent crude oil forecast to average $62.39/bbl in 2018, against its January projection of $59.74/bbl.
Full-year Brent oil prices averaged $54 per barrel in 2017, compared with Jadwa’s forecast of $52 per barrel, supported by improving sentiment over global oil demand and adherence to the production cut deal by OPEC and non-OPEC members, the firm said.
In its latest monthly oil report, OPEC raised global oil demand up for the fifth consecutive month, underlining the bullish tone towards oil prices in recent months.
Meanwhile, latest forecasts from the EIA show sizable increases in total US crude oil production in both 2017 and 2018, with output expected to rise by 5 percent to 10.1 million barrels per day (mbpd) in 2018.
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