Bank of America: Oil prices to reach $100
By Sara Israfilbayova
Oil prices rise on the basis of trading on Thursday on the commodity exchanges of London and New York.
Brent crude oil futures were at $77.34 per barrel, down 0.13 percent, U.S. West Texas Intermediate (WTI) crude futures were down 0.06 percent, at $71.30 a barrel, according to Interfax.
Bank of America expects that oil prices could rise to $100 per barrel in 2019, Bloomberg reported.
It is noted that futures for Brent crude oil, which traded on May 10 at a level of more than $ 77 per barrel, will grow to $90 in the second quarter of next year.
However, Bank of America experts are confident that the cost of oil could rise to $100 per barrel because of a possible extension of the OPEC+ agreement on cutbacks in production and U.S. sanctions against Iran.
The share of Tehran in the global supply in the oil market is 4 percent, so sanctions against Iran can lead to a reduction in the volume of black gold on the market.
At the same time, Goldman Sachs analysts are sure that the rise in oil prices will be short-term. According to them, in the summer prices for Brent crude oil could reach $82.5 per barrel, but in 2019 oil will again be cheaper.
World oil prices are also supported by data on the reserves of raw materials in the US. the country’s Energy Ministry reported that commercial oil reserves in the U.S. (excluding the strategic reserve) for last week decreased by 2.2 million barrels, or 0.5 percent, to 433.8 million barrels, while projected to reduce only to 0.2 million barrels.
Moreover, Donald Trump announced the withdrawal of America from the Iranian deal reached by the 6 international mediators (Russia, the United States, Britain, China, France, Germany) in 2015.
In addition, the American leader announced the restoration of all sanctions against Iran. After that, oil prices updated highs for 3.5 years.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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Sara Israfilbayova is AzerNews’ staff journalist, follow her on Twitter: @Sara_999Is
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