Lagos — A monthly survey of 31 economists and analysts forecast Brent crude would average $68.57 a barrel in 2019, more than 2 percent higher than the $67.12 forecast in the previous poll in March.
The poll conducted by Reuters on Tuesday said oil prices are likely to stay buoyant this year, rising to an average of $68.57 a barrel as the U.S. supply gets tighter due to the U.S’ decision to end waivers on Iranian oil and OPEC output curbs.
Brent oil price hit $72.66 on Tuesday as analysts raised oil forecasts for a second straight month.
Oil has already rallied about 40 percent since the beginning of the year mainly helped by a deal between the Organization of the Petroleum Exporting Countries and other producers including Russia to curb output.
To compensate for the reduced supply from Iran, the United States is pressuring OPEC to raise output.
A majority of analysts who participated in the poll expect OPEC cuts to be extended until the end of the year, but at the same time they expect the group to recoup deteriorating output from Venezuela and Iran.
“Our expectation is for OPEC+ output to increase in the second half of 2019 as members chase higher oil prices but ultimately will contribute to an oversupplied market,” said Edward Bell of Emirates NBD bank.
Analysts expect Brent to average around $70 per barrel in the second and third quarters of this year, but fall slightly to near $69 by year-end due to rising production from the United States and lingering concerns over economic growth.
U.S. crude oil output from seven major shale formations is expected to rise to a record 8.46 million bpd in May, according to the U.S. Energy Information Administration.
Growth in global oil demand is expected to ease to 1-1.4 million barrels per day (bpd) this year from 1.2–1.5 million bpd forecast in the March poll.