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Most oil industry experts see oil below $60 through 2017
09 September 2016 , 18:20Neftegaz.RU926
Most top experts from the oil industry do not expect oil prices to trade beyond $60 per barrel in the next 12 months.
According to a Bloomberg survey at the Asia-Pacific Petroleum Conference in Singapore this week, 14 out of 15 senior oil traders and executives project oil prices to trade within a price range of $40 to $60 per barrel for the next year.
«The issue is that once prices go up too fast, American drillers start to produce more,» said Arzu Azimov, the Head of SOCARTrading. «The market will stay in the corridor of $40 to $50, max $55.»
Top analysts have once again been forced to revise down their expectations. Oil traders interviewed by Bloomberg said that they were more bullish at the beginning of this year, but Iran, Saudi Arabia and even resilient U.S. shale surprised with higher-than-expected output, delaying the eventual and inevitable rebalancing.
«The oil market isn’t yet balanced,» Saad Rahim, chief economist at Trafigura Group Pte., said in an interview. «The market has yet to start working through millions of barrels of inventories accumulated during the downturn.»
A separate survey from The Wall Street Journal of 12 major investment banks finds similar results. The banks project an average Brent crude price of $57 per barrel in 2017, up slightly from an August survey.
«I don’t see a fundamental justification for prices above $50,» said Hamza Khan, the Head of commodity strategy at ING Bank. ING expects Brent to stay near $40 this year and next.
Nearly all of the experts and investment banks were unimpressed by the rumors about the OPEC production freeze deal. Most questioned the ability of the group to reach an agreement, and in any event, dismissed the potential deal as not all that significant for oil prices.
«Every time before an OPEC meeting they say a freeze is a good idea and every time they come out empty-handed,» told Hamza Khan. «It’s pretty clear that producers are focused on pumping as much as they could.»
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