Analysts: OPEC Deal will see Brent Hit $72

Analysts: OPEC Deal will see Brent Hit $72
The price of Brent crude oil will hit $58 per barrel in 2017 and $72 per barrel in 2018, according to forecasts from oil and gas analysts at investment bank Jefferies.

The price of Brent crude oil will hit $58 per barrel in 2017 and $72 per barrel in 2018, following OPEC’s pledge to cut production earlier this week, according to forecasts from oil and gas analysts at investment bank Jefferies.

These predictions anticipate a slower price climb than the one forecasted by David Pursell, Tudor Pickering Holt & Co. managing director, after hearing that OPEC had agreed to curb output for the first time since 2008. Pursell told investors that the production cut could get inventories down to normal levels by next summer, which would grow confidence that oil could price at $75 per barrel in 2017.

“The return of US shale seems inevitable in a rising price environment, but we believe there will be a long enough lag in US production growth to choke off a price recovery in 2017,” oil and gas analysts at Jefferies said in a brief research note sent to Rigzone.  

“We believe that the market will require US shale growth to maintain market balance in the medium term,” they added.

As part of the deal, OPEC will reduce its production to 32.5 million barrels per day, which is about 200,000 bpd more than initially proposed.

Saudi Arabia will cut the most – about 40 percent of the total – which comes to 500,000 bpd, with Iraq and Russia adjusting down by 210,000 bpd and 300,000 bpd, respectively. The deal will begin Jan. 1 and will run for six months.

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

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Brent Crude Oil : $54.46/BBL 0.96%
Light Crude Oil : $51.68/BBL 1.21%
Natural Gas : $3.44/MMBtu 1.99%
Updated in last 24 hours