Global glut to temper oil price gains this year: Reuters poll

Tue May 31, 2016 8:03am EDT
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By Apeksha Nair

(Reuters) - Global oversupply in crude oil is likely to limit price gains this year despite a series of unplanned outages and shrinking U.S. shale production, a Reuters poll showed on Tuesday. OILPOLL OILPOLL2

Wildfires in Canada, political unrest in Venezuela and supply disruptions in Nigeria and Libya have wiped out nearly 4 million barrels of daily production.

That has soothed some of the concern about oversupply and helped push oil prices close to $50 a barrel for the first time in seven months.

But analysts do not expect annual prices to average much more than that before next year.

In the latest monthly Reuters poll, the 33 analysts surveyed forecast a 2016 Brent crude LCOc1 average price of $43.60 per barrel, up $1.30 from a forecast of $42.30 a month earlier.

That marked a third consecutive monthly rise in forecasts for Brent prices, which have averaged about $39 so far this year.

But record-high global oil inventories were expected to curb any major gains for some time.

Brent futures were expected to average $56.40 per barrel in 2017 and rise to $64.30 in 2018, the poll showed.   Continued...

A pump jack stands idle in Dewitt County, Texas January 13, 2016.  REUTERS/Anna Driver