Oil prices may rise to USD 60 a barrel by the end of this year or by early 2018 as OPEC and non-OPEC producers are expected to extend supply cuts beyond March, while oil inventories continue to decline, Mr Ibrahim al-Muhanna former Saudi energy ministry official said in a speech Washington.
Mr Al-Muhanna said that “With the current arrangement and commitment of major producers, and their willingness to adjust and extend the agreement, I believe as commercial oil stocks continue to contract, oil prices will gradually increase. We even might hit USD 60 per barrel before the end of this year or the beginning of next year.”
He said that global commercial stocks are being drawn down gradually, more slowly than initially hoped, and oil demand is growing by more than 1.5 million barrels per day this year, with robust growth forecast for next year.
He added that “Some market analysts have argued that once the agreement ends, the producers will flood the market with new supplies but this view is short sighted. After all, it is in the best interest of producers to create a soft landing and not disrupt the market’s newfound balance.” Source : REUTERS Pipe Industry Co., Limited (www.wilsonpipeline.com)
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