As Middle Eastern producers were…
Regulations and constraints on land…
Some investment banks doubt that the recent stockpile drops will continue after the summer season ends, as growing U.S. output could reverse the inventory trend later this year, according to The Wall Street Journal survey of 15 banks that cut again—for a third month in a row—their oil price forecasts for this year and next.
The banks now expect Brent crude prices to average US$53 in 2017, slashing the forecast by US$2 from the June survey. WTI prices are seen averaging US$51 this year, a US$1.00 downward revision from the June survey, according to The Journal poll.
For 2018, the banks expect Brent prices to average US$55, down by US$2 from the previous poll. The WTI forecast was also cut by US$2 from the June survey, and the U.S. benchmark price is now expected to average US$53 next year.
The current forecasts for 2019 are not very high either, with U.S. shale seen as a key factor in long-term price projections. The banks polled by The Journal expect Brent prices to average below US$60—US$59.60 to be precise—in 2019, compared to a forecast for an average US$74 Brent price in the poll from July last year.
This week the EIA reported a modest draw in inventories, following strong draws in the previous weeks.
According to a report by Michael Wittner, chief oil analyst at Societe Generale, as quoted by The Journal:
“In the very near term, we are cautious about prices, especially in September and October, when the seasonality of crude and product demand turns bearish.”
Hamza Khan, head of commodity strategy at ING Bank, told The Journal that he expected oil prices in the mid-$40s “with considerable risk to the downside should there be an increase in non-OPEC production or a collapse in the OPEC” deal.
Related: How Will The EU Respond To Fresh US Sanctions On Russia?
At the beginning of this week, 33 economists and analysts surveyed in the monthly Reuters poll cut for a sixth consecutive month their oil price forecasts for 2017 and 2018, as the slower-than-expected rate of oil market rebalancing puts an increasing amount of pressure on OPEC’s resolve to stick with the cuts. Brent crude prices are seen averaging US$52.45 per barrel this year, down from the previous US$53.96 forecast, while WTI prices are expected to average US$50.08 in 2017, compared to US$51.92 in the June poll.
At 10:14am EDT on Friday, WTI was down 0.12 percent at US$48.97, while Brent was down 0.1 percent to US$51.96.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.