You are here: Home » Economy & Policy » News
Business Standard

Moody's Investors Service cuts oil price estimate to $33/bbl

BS Reporter 

Moody's Investors Service cuts oil price estimate to $33/bbl

Moody's Investors Service said on Friday reduced oil price estimates in light of the continued oversupply in the global oil markets, with Iran poised to add 500,000 barrels per day (bpd) while demand growth remains tepid.

Brent crude, the international benchmark, and West Texas Intermediate (WTI) crude, the North American benchmark, will both average $33 a barrel (bbl) for 2016. For Brent, this marks a $10/bbl reduction from its previous estimate, and for WTI a $7/bbl reduction. Both prices will rise by $5/bbl on average in 2017 and in 2018.

The Organization of the Petroleum Exporting Countries (Opec) and many non-Opec oil producers continue to produce without restraint as they battle for market share.

The addition of Iranian oil to the market in 2016 will offset or exceed a roughly 500,000-bpd decline in the US production, Moody's Investors Service stated in a report released on Friday.

Increased production vastly exceeds growth in oil consumption, even with consumption growth by major consumers such as the US, China and India. Production now exceeds demand by two million bpd, adding to the already high global oil stocks.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, January 23 2016. 00:36 IST