In the first half of 2019, the price of oil is expected to reach $55 to 65 per barrel (pb) with Kuwaiti oil at around $50 to 60 pb, said an analyst Tuesday.
Speaking to KUNA, Mohammad Al-Shatti – an oil analyst – said that it was too early to have a concrete idea of where the prices will be going this year due numerous variables and challenges.
With that being said, the analyst forecasted the price of the Brent crude for the second half of the year to reach $70 to 80 pb, and equivalent of $65 to 75 pb in Kuwaiti oil.
He indicated that prices will vary according to forthcoming developments, noting that the continuous decrease in Iranian oil production to around three million bpd, the continuing of the agreement to cutdown on production by the OPEC and non-OPEC coalition, the status quo of the US-Chinese trade war will play huge part roles in determining the stability of prices.
Other factors will also have an impact, affirmed Al-Shatti who indicated that the Brent crude price will probably be less than the price in 2018 by $5 to 10 pb.
When and if the crude price goes up, it would be important to analyze the causes, said Al-Shatti who added that it would be interesting to see how the decrease of supplies in the light of the Saudi plus-400,000 barrel per day (bpd) production decrease will play in the international market.
He said that the decrease of Iranian oil production by 800,000 bpd and the and the OPEC and non- OPEC intention to decrease production by 1.2 million bpd for the first six months of 2019 provided an insight of a serious intention to stabilize prices for both producers and consumers.
Meanwhile, there are still fears of the global economy entering a phase of regression as a result of various happenings including the US China trade war, which occurred late in 2018, stated the official.
He added that there was still hope for a positive outlook with news regarding negotiations between the US and China, which will hopefully have some positive impact on global economy and the price of oil. The analyst touched on the status of Shale oil, saying that the only way to monitor the price of this type of oil was through the prices of other types and the status quo of the market.
The US, Russia, and Saudi Arabia are the biggest produces in the world with a combined 11 million bpd, said Al-Shatti who affirmed that the market was in need of crude oil at a reasonable production level and stable price.
The coalition of oil producers had achieve great milestones in 2017-18 and hopefully such things will continue this year, he said.