Ike Amos 23 December 2014, Sweetcrude, Lagos – Oil prices are expected to rebound in 2015 and 2016 as the market stabilises in the wake of a near-40 per cent collapse this year, the latest Reuters monthly poll has shown.
The poll indicated that analysts still see oil prices averaging more than $10 a barrel above current levels next year, even though forecasts have collapsed in the wake of the recent Organisation of the Petroleum Exporting Countries, OPEC’s, decision not to cut output despite a global glut.
The survey of 31 analysts and economists, conducted after the OPEC recent meeting in Vienna, Austria, forecast North Sea Brent crude would average $82.50 a barrel in 2015, down $11.20 from last month’s poll.
It is the biggest downgrade in average forecasts since the global economic crisis in 2008 and compares with an average price of around $102 for Brent so far this year. The poll forecast Brent would average $87.40 in 2016.
But the projections are still well above current prices. Brent traded around $70 a barrel two weeks ago, down from a high above $115 on June 19. Brent reached a five-year low of $67.53 a barrel last week while US crude touched $63.72.
“We could see a base for recovery in the second half of next year,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. “We could even see $85 a barrel by late 2015.”
Twenty-one of the 29 analysts who contributed to both the October and the latest poll cut their forecasts. Fifteen said they changed their forecasts after the OPEC meeting.
“OPEC’s decision to maintain its production entrenches a surplus. At current levels of OPEC crude output, the market faces 1.5 million to 2 million barrels per day of surplus,” said Gareth Lewis-Davies, strategist at BNP Paribas
In Reuters’ monthly oil price poll in June, analysts had forecast Brent would average $104.80 in 2015.
Italy’s Nomisma Energia had the lowest 2015 Brent forecast in the latest Reuters poll at $69.18 a barrel, while US based brokerage Sanford C. Bernstein had the highest forecast at $104.