Oil prices to grow in 2018 and 2019

Mubasher: Oil prices are forecast to increase in 2018 and 2019, following their recent gain towards $80 per barrel (pb) last week.

On this note, Qatar National Bank (QNB) Economics raised its projections for oil prices for the remainder of 2018 and next year.

For 2018, QNB expects oil prices to reach $69 pb by the end of 2018, raising its forecast from $63 pb previously. It also hiked its projection for 2019 to $66 pb from $61 pb in a previous report.

It is worth noting that crude prices have registered new growth over the previous week, hitting $80 pb then falling back to $79 pb.

“A number of factors have pushed oil prices up more than expected [in] 2018. On the supply side, compliance with the [agreement with the Organization of the Petroleum Exporting Countries] (OPEC) to cut production has been impressively strong at 163% within OPEC itself and at 90% among the non-OPEC parties to the agreement,” the report said.

On Friday, Nymex crude futures inched down 0.3%, reaching $71.28 a barrel, but registered a rise for the whole week, they grew 0.8%. Meanwhile, Brent crude increased 0.9% to $78.52 per barrel.

“The supply outlook has been further depressed by a deteriorating political and economic situation in Venezuela and the re-imposition of US sanctions on Iran. Finally, infrastructure bottlenecks in US shale oil fields have constrained the near-term outlook for US supply growth,” the report by QNB Economics highlighted.