Baku, Azerbaijan, Apr. 3
By Leman Zeynalova – Trend:
Oil prices are forecast to remain below $70/barrel as upward price pressure stemming from reduced output by members of the Organization of the Petroleum Exporting Countries (OPEC) is tempered by downward pressure from higher output outside of OPEC and by global growth concerns, Trend reports citing the Asian Development Outlook (ADO) 2019: Strengthening Disaster Resilience.
The Bank believes that opposing factors will keep Brent crude oil prices volatile.
“Support for oil prices will come from the forecast increase in global oil demand, agreed oil production cuts, and economic and geopolitical tensions that impinge on oil production and trade. Upward price pressure will come as well from the implementation of the International Maritime Organization’s 0.50 percent global sulfur cap for marine fuels on 1 January 2020, especially for Brent and West Texas intermediate crude, which have relatively low sulfur content,” reads the report.
ADB expects that upward pressure on Brent crude prices will be tempered, however, by concerns about slowing global economic growth, further strengthening of the US dollar, the resumption of oil production in Libya from El Sharara, and higher US crude oil production.
“The futures market shows Brent crude trading above $60/barrel to the forecast horizon. Barring major supply disruptions, the price of Brent crude is forecast to average $62/ barrel in both 2019 and 2020,” the report reads.
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