FirstEnergy Expects Crude Oil Price to Hit $70 in 2018

FirstEnergy Expects Crude Oil Price to Hit $70 in 2018
Crude oil prices will rebound towards $70 per barrel in 2018, according to oil and gas analysts at FirstEnergy.

Crude oil prices will rebound towards $70 per barrel in 2018, according to oil and gas analysts at FirstEnergy.

“We have increased our expectations for crude oil prices across our entire forecast horizon,” said FirstEnergy’s oil and gas analyst Martin King in a research note sent to Rigzone.

“We anticipate prices closer to $50 per barrel as the new average for 2016, with a steady increase to $60 per barrel in 2017, and higher prices toward $70 per barrel in 2018. Going forward, we expect that further supply erosion, led by the United States, and stronger demand growth, led by the emerging economies, will result in a gradual, but steady drawdown in global inventories and that the market will be undersupplied well into 2017,” he added.

FirstEnergy analysts Darren Engels and Stephane Foucaud echoed King’s predictions, stating that oil would climb as high as $80 per barrel by 2019.

“Our Brent oil price forecast has increased by 15 percent to US$48.70 per barrel in 2016e (estimate) and by 9 percent to $62.50 per barrel in 2017e. Our longer-term Brent oil price forecast from 2019e has been increased by $2.50 to $79.50,” said the analysts in a joint statement.

“Depending on the overall exposure to oil for each company, the nature of fiscal terms and the size of the hedging books, our cash flow estimates for 2016e and 2017e for most larger E&Ps have been increased by 10 percent to 46 percent. As expected, companies with large net debt positions benefit the most from the changes in our commodity price deck. We now rate Africa Oil, Nostrum Oil & Gas and Parex Resources as Top Picks,” the pair concluded.

FirstEnergy also raised its U.S. natural gas price expectations for 2016 and 2017, anticipating gains toward $4.00 per mmbtu by 2019. The outlook for Canadian natural gas prices was lowered in the near term but predicted to quickly recover to FirstEnergy’s “previous bullish outlook” by the first quarter of 2017.

A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist. Email Andreas at andreas.exarheas@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE

More from this Author
Andreas Exarheas
Assistant European Editor | Rigzone
 -  Green Energy Firm Fights UK Fracking P... (Dec 9)
 -  UKCS Oil, Gas Extraction Drops 10% (Dec 8)
 -  Analysts: Production Ramp-Up at TEN Cr... (Dec 7)
 -  Statoil to Stop Using H225 Helicopter ... (Dec 6)
 -  KRG Doing All It Can To Ensure IOC Pay... (Dec 5)


Most Popular Articles

From the Career Center
Jobs that may interest you
Executive Director
Expertise: Business Development|Executive|Project Management
Location: Houston, TX
 
Senior Accounting Analyst Job
Expertise: Accounting|Budget / Cost Control|Financial Analyst
Location: Denver, CO
 
Associate Product Portfolio Manager Job
Expertise: Business Development|Marketing|Sales
Location: Denver, CO
 
search for more jobs

Brent Crude Oil : $54.33/BBL 0.81%
Light Crude Oil : $51.5/BBL 1.29%
Natural Gas : $3.75/MMBtu 1.35%
Updated in last 24 hours