Baku, Azerbaijan, Feb.13
By Leman Zeynalova – Trend:
The European Commission has increased its forecasts for Brent crude oil prices for 2017 and 2018.
In its Winter 2017 European Economic Forecast, the European Commission expects the Brent oil prices to stand at $56.4 per barrel in 2017 and $56.9 per barrel in 2018.
This is while the organization‘s assumptions for 2017 and 2018 Brent prices were $54.7 per barrel and $56.8 per barrel, respectively in the Autumn 2016 Forecast.
If the oil output cuts agreed by OPEC and non-OPEC countries are fully implemented, the market should re-balance faster and move to a small deficit in the first half of 2017, according to the report.
During a meeting in Vienna, Austria, on Nov. 30, 2016, OPEC members decided to implement a new production target of 32.5 million barrels per day. Later, non-OPEC countries agreed to cut the output by 558,000 barrels per day during the meeting held Dec. 10, 2016.
Eleven non-OPEC countries – Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan – agreed to reduce the oil output.
“For the second half of 2017, the outlook is uncertain as the proposed cuts cover only the first six months and should be reviewed at the next OPEC ministerial meeting end of May,” said the report.
Moreover, according to the European Commission, the current price recovery provides some relief and incentives to raise output for other oil producers, including shale producers in the US.
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