Oil prices may soon start rising, bursting out of range and reaching $ 60 per barrel, according to Gary Ross, an analyst at PIRA Energy.
“Markets have consolidated, so we should expect a new round of growth”, – he said.
The April contract for West Texas Intermediate was trading at around $ 54 per barrel, and Brent – around $ 56.
As Ross said, prices will add about $ 5 per barrel.
Analysts expect reduction of oil reserves in the US, as the decline in OPEC production will begin to be felt in the market.
However, Ross often makes the “bullish” forecasts for oil. For example, in 2015 he expected that oil would rise to $ 75 in 2016, while prices, by contrast, fell hitting multi-year lows in February.
However, S&P Platts experts supported the new optimistic forecast provided by Ross.
Dave Ernsberger, head of the evaluation division, claims that Brent could rise to $ 65- $ 70 per barrel by December this year.
Analysts’ survey showed that 48% believe that the futures for Brent will cost $ 55- $ 65 per barrel next year.
Oil will hit $ 70 by the end of the year – Citi
Oil can rise to $ 70 per barrel by the end of 2017, as the rebalancing of supply and demand continues, analysts of Citi admit.
The bank raised its short-term price expectations by $ 5 to $ 55 per barrel for the first quarter and by $ 2 to $ 56 – for the second.
“Oil is unlikely to significantly exceed the current range of $ 53-58 per barrel in the short term, since the position of investors and reports on the US stocks will limit the rise in prices until the market has any narrowing signs”, – says Citi.
“A new influx into the world oil market from Iran and the US is expected, which will somewhat temper the rise in prices”, – said David Ernsberger from S&P Global Platts.
Citi’s optimism after 2017 is on the decline, as growth in the number of offshore producers in the United States, due to favorable oil prices, will play its role.
Another cause for concern in the market is the distribution of positions in derivatives, that is, a record number of net long positions and the current ratio of long and short positions, which is 10:1. It threatens with fall of oil to below $ 50 per barrel in the near future, says Eugen Weinberg, head of commodity unit at Commerzbank.
According to him, the focus on reducing OPEC’s production was a dummy maneuver, while the real events are taking place in the United States, trying to regain the championship in the world oil production.
“OPEC countries should recognize that they are no longer marginal producers, replaced by offshore companies, so prices will be under pressure this year, as soon as investors realize that the supply of oil on the market will not reduce”, – says Weinberg.
“There is no real reason for a rise in prices above $ 60 – $ 70 per barrel, as the proposal is unlikely to be reduced substantially. Prices can, conversely, sink to less than $ 50 per barrel and even reach $ 40 – $ 45 this year”, – he concludes.