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Brent crude price forecast for 2018 remains at $70 per barrel: Bank of America Merrill Lynch - Daily News Egypt

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Brent crude price forecast for 2018 remains at $70 per barrel: Bank of America Merrill Lynch

The forecasted price of Brent crude for 2018 remains at $70 per barrel, $4 lower than the current price, on the back of the OPEC and non-OPEC oil-producing countries’ agreement to increase production by 1m barrels per day, according to a Bank of America Merrill Lynch Global Research report issued on Monday. Egypt is highly …


The forecasted price of Brent crude for 2018 remains at $70 per barrel, $4 lower than the current price, on the back of the OPEC and non-OPEC oil-producing countries’ agreement to increase production by 1m barrels per day, according to a Bank of America Merrill Lynch Global Research report issued on Monday.

Egypt is highly vulnerable to crude oil price fluctuations, as each $1 increase in the Brent crude’s price would cost the state EGP 4bn, according to the Finance Ministry. Egypt’s fiscal year 2018/19 budget sets global oil prices at $67 per barrel, while in the 2017/18 budget, the price of an oil barrel globally was set at $55.

Reaching consensus has not been easy, as both Iran and Venezuela were initially opposed to an output hike. Also, the effects of renewed US sanctions on Iranian output are still unknown, weighing down on the negotiations.

However, according to the report, the bank retained their forecast that crude oil is to reach $90 per barrel in Q2 2019.

Moreover, the report indicated that the Trump administration would take advantage of any dip in oil prices to put additional pressure on Tehran, likely reducing downside risks to oil prices in the absence of a full-blown trade war.

In conclusion, Bank of America Merril Lynch believes that in the near-term, the agreement will also likely flatten the ratio of Brent crude versus WTI somewhat and, in doing so, could also force a slightly narrower Brent-WTI spread in Q3 2018.

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https://www.dailynewsegypt.com/2018/06/25/brent-crude-price-forecast-for-2018-remains-at-70-per-barrel-bank-of-america-merrill-lynch/
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