Analysts grow more bullish on oil, OPEC poses no threat to rebalancing

Fri Apr 29, 2016 7:44am EDT
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By Apeksha Nair and Arpan Varghese

(Reuters) - Analysts are growing increasingly confident that a near-two-year rout in oil has ended, and raised their price forecasts for a second month running, as healthier demand and a drop in U.S. shale output balance the market by 2017.

The inability of OPEC and non-OPEC producers to agree to limit oil output at a meeting earlier this month is not expected to slow the rebalancing of global demand and supply.

The survey of 29 analysts projected a slightly more bullish outlook, raising their average forecast for Brent crude futures in 2016 to $42.30 a barrel, compared to $40.90 in the March poll.

Last month's survey saw an upward revision in 2016 Brent forecasts for the first time in 10 months.

Brent has averaged about $40 a barrel in 2016. Oil prices are headed for a fourth straight week of gains and a rise of around 20 percent in April, their largest monthly increase in a year. [O/R]

Analysts said the failure of the Qatar meeting among the world's largest producers to reach an agreement to keep output at January's levels has had little or no impact on prices.

"The status quo is already such that virtually all producers, except Iran, have little to no room to increase production from current levels," said Raymond James analyst Luana Siegfried.

Since the April 17 stalemate in Doha, the oil price has rallied 21 percent to its highest since November.   Continued...

A female employee fills the tank of a car at a petrol station in Cairo, Egypt, February 24, 2016. REUTERS/Mohamed Abd El Ghany