Oil prices should stabilize in the second half of this year and rise in 2016 and 2017 as consumers respond to a period of much cheaper fuel, according to a Reuters poll of analysts released this morning.
The survey of 34 analysts predicts North Sea Brent crude will average $59.20 a barrel in 2015, up from around $55 so far this year. The forecast is up just 20 cents from the projection in last month’s Reuters survey. Brent crude, meanwhile, is expected to rise to $72.10 in 2016 and $78.70 in 2017, the poll shows.
Oil prices fell more than 60% between June 2014 and January, and although they have recovered somewhat since then, they remain around half their level a year ago. As of about 9:20 a.m., Brent was trading for $55.72, down $0.69. The drop in oil prices has encouraged motorists to make more use of their cars and let factories and other businesses boost fuel consumption.
London-based consultancy Energy Aspects expects world oil demand to rise by up to 1.5 million barrels per day this year. That’s double the rate of oil demand growth seen last year, according to the International Energy Agency.
“Global oil demand will surprise upwards, driven by the United States, China and emerging Asia,” says Intesa Sanpaolo analyst Daniela Corsini.
Increasing demand should help absorb any extra oil coming onto the market from Iran, if it can agree a nuclear deal with the West that would bring an end to sanctions. And some analysts see demand outstripping supply.
“The global market is expected to move into supply deficit in the second half (this year), with that deficit reaching 1 million bpd in the fourth quarter,” Standard Chartered analyst Paul Horsnell says.
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