Oil forecast to remain above $75 in 2018

Oil is expected to trade above $75 (Dh275.25) per barrel in 2018 despite a rise in US shale oil production and plans of Opec to ease production curbs, according to analysts.

Oil prices went down significantly in recent weeks as markets remained tense, following the announcement by Saudi Arabia and Russia of a possible production increment of one million barrels per day to stabilise oil prices.

The move came after concerns grew over increases in oil prices in the past year and their impact on global economic recovery.

Brent was down by 1.11 per cent at $76.46 per barrel and the US crude West Texas Intermediate (WTI) was trading at $65.74 per barrel, down by 0.32 per cent when markets closed on Friday.

Benjamin Lu, commodities analyst from Singaporebased Phillip Futures told Gulf News that both Saudi Arabia and Russia are likely to raise the output levels into 2019 though the pace will be gradual and measured.

On the possibility of the oil price retreating to $50 to $60 per barrel this year, Lu said such a scenario was unlikely.

“US production has experienced exponential growth but ongoing pipeline constraints will keep output measured. It is also not within Riyadh’s interest to over produce amid Aramco’s impending IPO.”

“We postulate prices to maintain $75 to $80 per barrel for Brent and $65 to $70 for WTI in 2018.”