Arab Bank: Brent Crude prices are refunded at $ 60-70


Brent crude prices are expected to trade between $ 60 and $ 70 a barrel in the second half of this year, unless the sharp global economic slowdown in the prospect of global demand for oil is reported by the Arab Petroleum Investments Corporation (APICORP). .

Following the four-year maximum Brent crude value of $ 85 in October, the international benchmark fell to just $ 54 at the end of 2018. Key reasons were concern about the global economy, the increase in production in the three largest oil producers – the US, Russia and Saudi Arabia – and the decline in mood (APICORP), a multilateral development bank, established in 1975 in accordance with an agreement signed by the ten countries of the Organization of Arab Oil Exporting Countries (OAPEC).

The decline in total production in OPEC and its non-OPEC partners in the contract of 1.2 million bpd may not be enough, APICORP warns, but warned that "the dynamics of oil prices in the year 2019 will be great depends on the effectiveness of the OPEC. in carrying out reductions, balancing the market and strengthening the credibility of its signals. "

"Although OPEC should reduce its production in 2019 in order to balance the market, US production should keep its momentum," the bank said.

APICORP believes that the pace of world demand for oil will be more important for oil prices than supply in the market.

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"According to recent OIES research, demand growth for oil was stronger than expected, which represented 80% of the market rebound, and the slowdown in the global economy, which will lead to lower demand growth, has a major impact on oil prices. And the concern of the global economy is increasing, "APICORP said.

"In short, based solely on the fundamentals, a collective reduction of 1.2 mb / d between the OPEC and its allies, the high probability of supply losses with Iran, Venezuela, Libya and Canada, and the global oil demand of 1.4 mb / d will achieve a balance in 2019. "

Oil prices will continue to be under pressure until the market shows signs of stock drainage, APICORP notes.

"The main challenge of the OPEC will be to tackle physical imbalances in the market and to enforce its credibility for a consistent management of expectations and moods," the bank said.

Author Tsvetana Paraskova for

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