OPEC and Russia’s pledge to boost oil production will not be enough to offset supply disruptions from Iran and Venezuela amid strong oil demand, according to a monthly Reuters poll of analysts and economists who raised, yet again, their oil price forecasts for 2018.
According to the Reuters poll of 35 analysts and economists on Friday, the experts expect Brent Crude to average $72.58 per barrel this year, which is 90 cents higher than the $71.68 projection from last month’s poll, and compares with the average Brent Crude price of $71.15 so far this year.
In the May survey, analysts had boosted their Brent forecast by $4 a barrel compared to their April projections, expecting supply disruptions in Iran and Venezuela to more than outweigh the anticipated increase in OPEC and allies’ oil production.
In this month’s survey, analysts also raised their forecast for WTI Crude, and they now see the U.S. oil benchmark averaging $66.79 per barrel this year, up from $66.47 expected last month.
At 08:40 a.m. EDT on Friday, WTI Crude was up 0.03 percent at $73.47, while Brent Crude was trading up 1.07 percent at $78.44. Related: BP To Buy UK’s Largest EV Charging Company
Despite the fact that OPEC and Russia are promising to add up to 1 million barrels of oil per day to the market—with most analysts expecting the actual rise to be around 700,000 bpd—oil prices have been supported this week by the U.S. push to have Iranian oil exports reduced “to zero”, as well as outages in Libya and in Canada’s oil sands.
“Supply deficit in the oil market is here to stay,” Frank Schallenberger, head of commodity research at LBBW, told Reuters for the poll, adding that he expected OPEC to boost production by around 600,000-800,000 bpd by the end of this year. This, however, will not be enough to offset declining supply amid rising global demand, according to Schallenberger.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More