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Barclays raises oil price view on tighter supply outlook

Reuters 

(Reuters) - British on Tuesday raised its outlook for for this year and next amid expectations of lower supply from and

"Due to new outages and a quicker supply reduction, we see Brent and WTI prices averaging $71 per barrel and $65 per barrel next year," the said.

had previously forecast Brent to average $65 per barrel in 2019. The also raised its outlook for Brent prices to average $73 per barrel in the second half of the year from $70 earlier.

Libya's national fell to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February following recent oil port closures, the of the (NOC) said on Monday.

The says it wants to reduce from Iran, the world's fifth-biggest producer, to zero by November, which would oblige other to pump more.

Elsewhere, in an outage at the 360,000-barrel per day (bpd) had reduced flows into Cushing, where inventories hit a three-and-a-half-year low last week.

While the WTI-Brent spread has narrowed since May due to the outage at Syncrude, it could widen again toward the end of the year to $7.50 in Q4, said.

The bank also said the likelihood of increasing exports to the in the coming months could likely weaken the strong WTI backwardation.

have gained for most of 2018 on tightening supply and strong demand but investors fear a decision by the Organization of the Petroleum Exporting Countries to increase production may dampen price gains and offset production losses in countries including [O/R]

"Indeed, OPEC's decision and disruptions elsewhere will deplete the market's spare capacity cushion, raising prices," Barclays said, however, warning bulls to beware of Saudi Arabia's and Russia's clear willingness to cap upside in prices.

"As prices rise to higher levels, the air is growing thin and is already faltering," Barclays noted.

(Reporting by in Bengaluru; Editing by Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 13:40 IST
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