Economists and analysts have kept their average Brent price outlook for 2016 almost unchanged at US$44.78 per barrel, as growing hurdles to a global deal on production limits put downside pressure on crude oil prices, according to a Reuters poll out on Monday.
A total of 35 economists and analysts surveyed by Reuters reckon that the Brent prices would average US$57.08 next year. U.S. light crude CLc1 is expected to average US$43.46 this year and US$55.22 next year.
So far this year, Brent has averaged US$43.93 and WTI has averaged US$42.31.
At the time of writing, WTI Crude traded down 0.53 percent at US$48.44, while the Brent Crude was down 0.49 percent at US$50.43.
In the previous Reuters poll - when OPEC producers had just agreed to work toward a deal to cut their total crude production at between 32.5 million bpd and 33 million bpd – analysts had their doubts that the cartel would pull off a real deal.
Back then the experts cut their estimates for the Brent LCOc1 price to US$44.74 from the US$45.44 price outlook in August—the second outlook reduction in a row following five consecutive upward revisions. The 2017 forecast for the Brent price was then reduced to US$57.28 from US$57.90.
In today’s Reuters poll, a possible failure of an OPEC deal is not the only downside risk to higher oil prices. Economists also see a possible Fed rate hike, a slowdown in Chinese growth, and less tension in Nigeria and Libya as potential hurdles in seeing substantial oil price increases.
If OPEC fails to reach a deal, a sell-off could result in oil prices plunging to US$40, and the supply glut could linger until at least the second half next year, analysts polled by Reuters say.
This weekend’s OPEC-only and OPEC-non-OPEC meetings in Vienna did not result in any substantial preliminary decision ahead of the November 30 OPEC summit, at which production limits are expected to be discussed in detail.
Heading into the weekend meeting, OPEC members were divided, with two of the heavyweights, Iran and Iraq, disputing OPEC data on output. A week before that Iraq put further pressure on the chances of a possible deal, saying that it should be exempt from production cuts because of the war it is fighting against ISIS.
By Tsvetana Paraskova for Oilprice.com
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