Crude oil prices jumped over 3 per cent on Monday after the US announced its decision to not renew Iran sanction waivers, pressuring importers to stop buying from the country.
Brent crude, the global benchmark, rose as much as 3.3 per cent to $74.31 per barrel on Monday, the highest since November 1. US West Texas Intermediate (WTI) climbed by as much as 2.9 per cent to $65.87, the highest since October 31.
As investors fear that Brent crude may touch $80 levels again, here’s a look at where leading global analysts expect it to be.
RBC Capital Markets: RBC in April said that international oil prices will average $75 a barrel in 2019, and consumers may find themselves contending with bouts of $80 crude this summer.
RBC’s $75 call for international Brent crude is up from a previous 2019 forecast of $69.50 per barrel. The bank also boosted its outlook for US WTI crude from $61.30 per barrel to $67 for 2019.
The global investment bank revised its oil price forecast higher, pointing to a cocktail of market conditions. Those include steep Opec supply cuts, robust demand, geopolitical risk and investor positioning.
FSMR: Analysts at Fitch Solutions Macro Research (FSMR) had, earlier this year, given a forecast that Brent will average $73 per barrel in 2019. Looking further ahead, FSMR analysts predicted Brent will average $80 per barrel in 2020–down from their previous forecast of $82-84 per barrel in 2021 and $85 per barrel in 2022.
EIA: Meanwhile, US Energy Information Administration (EIA) forecast that Brent spot prices will average $65 per barrel in 2019 and $62 in 2020, compared with an average of $71 in 2018. EIA expected that WTI crude oil prices will average $8 per barrel lower than Brent prices in the first half of 2019 before the discount gradually falls to $4 in late-2019 and through 2020.
Goldman Sachs: Goldman Sachs had also downgraded its oil price forecasts for 2019, citing a surge in global production and surprisingly resilient US shale growth.
The investment bank expected international benchmark Brent crude to average $62.50 per barrel this year, down from a previous forecast of $70. Meanwhile, US WTI was expected to average $55.50 in 2019, down from a prior estimate of $64.50, the investment bank said in a research note.
JP Morgan: JP Morgan had cut its outlook for oil, predicting that Brent crude prices will average $73 per barrel in 2019 — down from the investment bank’s previous forecast of $83.50.
The investment bank said it revised its outlook in part due to North American supply ramping up in the second half of next year. JP Morgan expected the price of Brent, the international benchmark for oil, to go toward $64 in 2020.
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