A survey of 12 investment banks by The Wall Street Journal sees Brent crude, the global oil-price gauge, averaging $57 a barrel next year, up by less than a dollar from last month’s survey.
Advertisement
“While earlier Russian Federation would promote its interests within OPEC through Iran and Venezuela, which in April this year, along with Kuwait, initiated the discussion on the production freeze, now Moscow is closely interdependent with Riyadh”, said Stanislav Werner, vice president of Moscow-based consulting firm IFC Financial Center. The West Texas Intermediate (WTI) benchmark for USA crude inventories fell $1.91 or 4% to close at $45.71 a barrel on the New York Mercantile Exchange.
OPEC and other producers can reconcile talks aimed at stabilizing the oil market with the prerogative of Iran, Nigeria and Libya to boost output, according to Algeria’s energy minister.
“I don’t see a fundamental justification for prices above $50” a barrel, said Hamza Khan, head of commodity strategy at ING Bank, who forecasts that prices will hover around $40 this year and next.
“We hope that the divisions within OPEC will soon be overcome and a compromise solution would be found”, Novak said. Lotos’ bigger rival PKN Orlen signed an oil supply deal with Saudi Aramco earlier this year.
In early morning trade Thursday, Brent was trading up 1.6% at $48.74 a barrel, while WTI was up 1.9% at $46.39 a barrel.
Hamidreza Shahdoust, a local Iranian Oil Terminals Company (IOTC) official in the city of northern city of Neka, had said earlier that Neka Oil Terminal enjoys a total storage capacity of 120 thousand barrels per day in its 12 tanks; “moreover, the project to increase oil swap capacity to 2.5 million barrels per day has kicked off”, he had noted. Officials in Tehran repeatedly announced that Iran would join the plan after its output reaches 4 million barrels per day. It now produces around 3.6 million barrels a day.
“The prospects of any agreement on production caps being reached that will genuinely help the oil market could not be slighter”, analysts at Commerzbank said in a report. “But what do they really mean, because the oil market is today in many ways actually fairly balanced?”
Advertisement
In his words, the US shale industry has shown a remarkable ability to revitalize itself: In August 2016 the number of drills grew thanks to the stabilization of oil prices above $40 a barrel. Last summer, numerous same banks were predicting oil prices would rise to more than $70 a barrel this year.
