Baku, Azerbaijan, Oct.6
By Leman Zeynalova – Trend:
Brent oil will come under seasonal price pressure in the coming months, as refining demand softens and direct crude burn falls, according to BMI Research, (a Fitch Group company).
Historically, price growth has been weakest in Q4 with Brent averaging monthly losses of 2.4 percent for the quarter, over the last 25 years, said the analysis obtained by Trend.
“We are revising up our 2018 annual average forecast to $57 per barrel and our longer-term outlook to $73.0 per barrel by 2022, from $55 per barrel and $70.0 per barrel previously,” said the report.
Arguably, in the long term, the most important factor for prices will be the trend in US shale, which BMI Research expects to disappoint market expectations.
“We forecast annual average shale growth of 220,000 barrels per day for 2018, significantly below consensus,” said the company.
Prices in H118 which the analysts forecast to average $49 per barrel for West Texas Intermediate (WTI) will remain unsupportive of new wells in most parts of the US shale patch.
Reported breakevens often appear favourable below this price level, but tend to exclude various full-cycle costs, such as taxes, royalties and general overheads, according to the analysis.
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