• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 21 mins Would bashing China solve all the problems of the United States
  • 13 mins Let’s Try This....
  • 59 mins Chicago Threatens To Condemn - Possibly Demolish - Churches Defying Lockdown
  • 18 mins COVID 19 May Be Less Deadly Than Flu Study Finds
  • 3 hours 60 mph electric mopeds
  • 13 hours New Aussie "big batteries"
  • 18 hours The CDC confirms remarkably low coronavirus death rate. Where is the media?
  • 22 mins Pompeo's Hong Kong
  • 3 hours China to Impose Dictatorship on Hong Kong
  • 1 hour Monetary and Fiscal Policies in Times of Large Debt:
  • 14 hours Backlash Against Chinese
  • 2 days Iran's first oil tanker has arrived near Venezuela
Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Strong Demand Expectations To Lift Oil Prices

Optimism about crude oil demand in the coming weeks has helped prices to recover somewhat, but the sustainability of the improvement is highly uncertain. Bank of America Merrill Lynch is now forecasting robust gasoline demand in the coming weeks, based on weekly data, which “compares favorably to the five-year average and miles driven also continue to grow year-on-year.”

At the same time, however, another bank slashed its oil price forecast for the short term. French BNP Paribas revised its Brent average forecast for this year by US$9 to US$51 a barrel, seeing WTI at US$49, down US$8 from its earlier forecast. The bank is even more pessimistic about next year.

It expects Brent to average US$48 in 2018, down from an earlier estimate of US$63, and sees WTI at US$45, down from an earlier projection of US$61. The revisions suggest the French lender had high hopes for OPEC’s production cut extension, and now that it has failed to push up prices, there doesn’t seem to be a lot of upward potential coming from anywhere else.

BofA added to the gloom by noting in its optimistic gasoline demand forecast that in absolute terms, peak demand may have come and gone last year, which doesn’t bode well for the longer term. Shale oil production is growing, and so is output in Nigeria and Libya, which, according to analysts quoted by Reuters, will in all likelihood continue to pressure prices.

OPEC may later this month ask Nigeria and Libya to put a cap on their production to help with the price recovery efforts, but it is unclear as of yet whether the two exempt OPEC members will be willing to do so. Earlier statements from Libyan and Nigerian oil officials suggest this may not be the case, although there is always the possibility of better oil revenues from higher prices at current production levels.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News