UK analysts don’t believe in OPEC’s attempts to agree on production freeze

Oil&Gas Materials 25 May 2016 17:24

Baku, Azerbaijan, May 25

By Aygun Badalova - Trend:

Analysts of UK economic research and consulting company Capital Economics don't expect OPEC to attempt to agree on a new production at the upcoming meeting in June.

"We do not expect the group to attempt to agree on a new production freeze deal and even reinstating a production quota may be difficult," analysts said in a report, obtained by Trend.

But the meeting may provide further insight into whether Saudi Arabia intends to increase output over the summer to deal with the usual peak in domestic demand, analysts believe.

The last meeting of oil producers in Doha ended without any agreement. The talks on the oil output freeze collapsed after Saudi Arabia surprised OPEC by reasserting the demand that Iran also agrees to cap its oil production.

The next OPEC meeting will be held June 2 in Vienna.

Capital Economics's analysts forecast Brent price at $42 a barrel in the third quarter of 2016 and $45 a barrel in the fourth quarter of the year.

In 2017, analysts predict Brent price at $50 a barrel in the first quarter and $55 a barrel in the second quarter.