Baku, Azerbaijan, May 24
By Aygun Badalova - Trend:
Analysts of the US JP Morgan bank have raised 2016 oil prices forecasts by $4.3 a barrel to $45.3 a barrel for Brent and $44.66 a barrel for WTI. 2017 forecasts have been raised to $55 a barrel for both WTI and Brent, an increase of $3 a barrel from the previous forecasts.
"Supply outages have outpaced market expectations and 2Q16 now looks like it will register a draw in commercial inventories, against expectations of a build of +0.8 million barrels per day last month," JP Morgan analysts said in a report obtained by Trend.
2H16 markets are now assessed as being tighter than previously expected, underpinning the price forecast increase to $50 a barrel on Brent and WTI.
Analysts said that faster declines in mature, high cost, production areas underpin the rebalancing of the market, augmented by the outages in Nigeria, Canada and Libya, and, despite higher Iranian and Russian supply estimates this month.
"Essentially, the big picture supply adjustment that we had anticipated to take hold in 2H16 has arrived one quarter earlier than we had expected. In the short term, prices are expected to remain volatile and very much at the whim of supply developments," analysts said.
The highest average price for both Brent and WTI in the course of 2016 and 2017 is expected by JP Morgan's analysts in the last quarter of the next year - at $60 a barrel.
Oil prices were down on Tuesday, dipping lower as the dollar strengthens and supply concerns grow, the Wall Street Journal reported.
Brent is trading down 0.99 percent at $47.87 a barrel. Its U.S. counterpart, WTI, is trading down 0.69 percent at $47.75 a barrel.