Baku, Azerbaijan, Dec. 8
By Aygun Badalova - Trend:
Analysts of the British economic research and consulting company Capital Economics expect Brent price to increase to $60 per barrel by end 2016.
Their forecast is based on lower non-OPEC supply and the prospect of stronger-than-expected demand.
In the report, obtained by Trend, analysts mentioned that reliable sources have reported that OPEC has agreed to raise its output target from 30 million barrels per day to 31.5 million barrels per day during the meeting of OPEC member countries on December 4.
"In the event, though, OPEC's Secretary-General has simply said that the group is "effectively maintaining its current output ceiling". Crucially, this is still consistent with an increase in the ceiling, because of the need to accommodate up to 1m bpd of oil from Indonesia which is rejoining the group," analysts said.
"Admittedly, setting the new target at 31.5m would perhaps be going a little further than necessary to accommodate Indonesia alone," the analysts' report said.
They believe that the likely easing of Western sanctions on Iran next year may be an additional factor.
"But a higher target would still only reflect the reality of over-supply: actual OPEC output including Indonesia is currently around 33 million barrels per day," analysts said.
"The upshot is that a higher target, even of 31.5 million barrels per day, would not necessarily mean any increase in the global supply of oil. Indeed, if compliance with the target improves, OPEC supply could still fall," analysts added.
Analysts forecasts Brent price to average $50 per barrel in the fourth quarter of 2015, $53 per barrel in the first quarter of 2016, $55 per barrel in the second quarter, $58 per barrel in the third quarter and $60 per barrel in the fourth quarter of the next year.
Global oil prices plunged from about $108 in the first half of 2014 to below $40 currently due to glut in markets.