Analysts Expect Oil Price to Average US$75 Per Barrel in 2019

The price of Brent crude oil will average US$75 per barrel next year, according to the latest forecast from oil and gas analysts at BMI Research.

BMI’s forecast is significantly higher than the Bloomberg consensus, which forecasts that Brent will average US$63.5 per barrel in 2019.

Analysts at BMI project that Brent will climb even higher in 2020, averaging US$78 per barrel, before plateauing at US$80 per barrel over the course of 2021 and 2022.

The Bloomberg consensus forecasts that Brent will average US$65 per barrel in 2020 and US$67.5 per barrel in 2021.

In 2018, BMI projects that Brent will average US$67 per barrel, which is US$2 higher than the organisation’s previous 2018 forecast of US$65 per barrel. The Bloomberg consensus forecasts an average Brent price of US$63.8 per barrel this year.

“We have upwardly revised our 2018 Brent price forecast due to accelerated market rebalancing and strong sentiment-driven support,” BMI analysts said.

Over the next three months, the analysts expect crude prices to stabilise due to strong compliance from OPEC/non-OPEC producers on output cuts and less robust growth in US output.

“We believe bullish expectations regarding US production growth are overblown due to a lack of readily available high-grade rigs and pressure pumping capacity,” the analysts said.

Heading into the second quarter of 2018, the analysts expect prices to receive additional support from an uptick in seasonal demand.

“Supportive rhetoric around the supply cuts made by participating OPEC/non-OPEC producers will also buoy prices leading up to their meeting on the 22^nd June. Our forecast assumes that the production cut deal will hold in its current form until December, with a high level of compliance maintained by OPEC and Russia,” the analysts said.

Source: Rigzone