Baku, Azerbaijan, Nov.3
By Leman Zeynalova – Trend:
More OPEC barrels are expected to return to the market in 2018, with year-on-year growth from the cut exempt Libya and Nigeria, said the report from BMI Research, (a Fitch Group company).
“Both Saudi Arabia and Russia have signaled support for an extension of OPEC/non-OPEC intervention in the oil market to the end of 2018. We expect the ordinary OPEC meeting on November 30 to conclude in a nine-month extension and, in a similar way to the same period in 2015/2016, to add support to prices over the weaker demand period of the year,” said the report obtained by Trend.
In this way, OPEC can more effectively over-promise and under-deliver, securing a level of support through Q417 and Q118, then gradually returning barrels to market in Q218 and Q318 as demand increases seasonally, BMI research analysts believe.
On May 25, 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.
As for the oil prices, BMI Research expects Brent to stand at $53.5 per barrel (bbl) in 2017, $57/bbl in 2018, $63/bbl in 2019, $70/bbl in 2020 and $72/bbl in 2021.
This is while the forecasts for West Texas Intermediate (WTI) oil are as follows: $50/bbl in 2017, $54/bbl in 2018, $61/bbl in 2019, $68/bbl in 2020 and $70 /bbl in 2021.
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