Baku, Azerbaijan, Oct.21
By Leman Zeynalova – Trend:
Oil prices have returned to top of $40-60 per barrel range, according to the analysts of the US JP Morgan Bank.
The market currently ascribes a roughly one in three chance (33 percent to be more precise) for Brent prices averaging $50 per barrel or below in December 2018, said the analysis obtained by Trend.
JP Morgan experts point out that oil prices remain supported by the structural tightening in oil markets. Stronger than expected demand growth is helping to balance market along with OPEC/non-OPEC joint supply cut, according to JP Morgan.
“Firstly, Chinese apparent oil demand, based on National Bureau of Statistics production and refining data, point to a stronger than expected apparent demand assessment for September. Elsewhere, stronger demand growth is now apparent in Europe,” said the analysts.
Furthermore, JP Morgan notes that OPEC and non-OPEC exporters continue to drip feed bullish comments about the chances of a second extension to the oil output cut agreement.
“Any further restraint to production from these exporters will support market consensus expectations on prices. An extension of output cuts for the entirety of next year would leave the market close to balanced,” said the analysis.
On May 25, 2017, OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan agreed to extend the production adjustments for a further period of nine months, with effect from July 1, 2017.
The reductions will be on the same terms as those agreed in November.
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