Oil will likely rally into 2018 with periods of volatility as an anticipated extension of OPEC-led output restrictions offsets higher U.S. production. Analysts raised their crude price projections, the survey showed, as expectations of an output cut extension were buoyed by comments from officials in Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries.
Ms Ashley Petersen of Stratas Advisors, said that “Rumours of extension, expansion or erosion (of the OPEC supply deal) could all impact prices and markets will be closely watching any statements from the upcoming meeting. Assuming, as we do, that the deal is extended through 2018, then actual levels of compliance will be a big factor in rebalancing through next year.”
OPEC compliance stands above a high 80 percent currently.
OPEC’s next meeting is in November, where the group and other producers including Russia are expected to prolong the output cuts of about 1.8 million barrels per day (bpd) beyond the current deadline at the end of March 2018.
The survey of 35 analysts predicted Brent would average $53.25 per barrel in 2017, up from last month’s $52.60 forecast. Brent crude futures have gained about 17 percent over the past two months and has averaged $53 this year.
Brent was forecast to average $55.71 in 2018, the poll showed.
The prospect of U.S. sanctions being reimposed on Iran and tensions in Iraq where the northern Kurdish region has been pushing for independence helped push up prices, analysts said.
Mr Abhishek Kumar, energy analyst at Interfax Energy’s Global Gas Analytics in London, said that “There is a real risk of some sanctions being (re)imposed on Iran.”
But some analysts said new sanctions would not lead to a substantial curbing of Iranian exports because Europe and Russia were unlikely to back them. The poll forecast US light crude would average $50.21 barrel in 2017 and USD 52.50 in 2018. Source : REUTERS Pipe Industry Co., Limited (www.wilsonpipeline.com)
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