Brent crude breached the $80 a barrel mark late 2018, hitting a four-year high, but plunged to $50 by year-end.
The price volatility was a result of several factors such as the US sanctions on Iran, OPEC+ plan to boost production to avoid a supply shortage but later agreeing to cut output as demand slackened, IMF cutting its growth forecast on the world economy and rising trade war tensions between the US and China.
Brent was trading at $61.69 a barrel, while WTI was at $53.44 a barrel at 11 am Riyadh time on Wednesday.
The above factors have led to top institutions reviewing their oil price forecast for 2019. Argaam has compiled the latest forecast from some of them.
International Monetary Fund
The International Monetary Fund lowered its oil price forecast to below $60 a barrel this year from $70 a barrel stated in its October World Economic Outlook, citing growing concerns over world economic growth.
Increased price volatility was a confluence of the US policy on Iranian oil exports and fears of waning global demand, it said in a recent report.
Goldman Sachs
Goldman Sachs cut its oil price forecast to average $62.50 a barrel this year, down from a previous estimate of $70 for 2019, citing rise in global production and rebounding US shale growth.
West Texas Intermediate (WTI) is likely to average $55.50 this year, down from its earlier estimate of $64.50.
Wood Mackenzie
Brent will average $65 per barrel in 2019, Wood Mackenzie said in its latest report. However, it forecasts global oil demand to grow 1.1 million barrels per day this year.
World Bank
The World Bank has predicted oil prices to average $67 a barrel this year, falling $2 compared to its June last year projections.
Energy Information Administration
The US Energy Information Administration lowered its 2019 forecast on Brent crude prices by 0.8 percent to $60.52 a barrel. It maintained its forecast for WTI at $54.19.
Fitch
The average price of Brent crude is expected at $75 per barrel, Fitch Solutions said.
The agency's bullish sentiments are supported by a tightening of supply and the presumption of a high level of compliance by the OPEC+ alliance in the first half of the year.
Write to Parag Deulgaonkar at parag.d@argaamplus.com
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