Crude price to move above US$65 by 2018

Manama

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Oil price will average US$55 in 2015, US$65 in 2017, and above by 2018, according to a top analyst. The Brent Crude Oil price at the London ICE futures exchange was seen trading at US$48.76 yesterday, up 2.2 per cent from its previous close. 

Crude oil price has been on a downward slope since June 2014. From a price of US$107 a barrel in June 2014, it has fallen to low 40’s in recent months, a decrease of more than 60pc.

The Associate Managing Director of Moody’s Financial Institution Group, Jean-Francois Tremblay, while speaking to DT News recently added that reduction in inventories, which might take time, will eventually happen and the reemergence of demand from emerging markets will help the oil price to reach better levels in coming years. 

He also added that, at the moment, there is no threat of global deflation.

Deflation is a situation in which prices of essential commodities as well as various asset classes suffer severe decline in value, resulting in deep problems for the economy. Deflation, like high-level of inflation is a worry for Central Banks across the world.

Recent data regarding the oil production and break even analysis of Shale oil companies pointed to a favourable demand-supply mismatch in coming years for oil-producing countries. US oil-rig count has been more than halved in last one year and would lead to decline in US oil production, according to experts.