Wednesday, May 18

Oil will maintain the upward path until the end of the year

The investment bank UBS has increased its forecast on a barrel of Brent, a benchmark in Europe up to $ 90 a barrel per day for the December-March period.

The Two main reasons would be that the oil market is still very tight and OPEC + supply is increasing “only gradually”, noted the Swiss entity in a note.

This view is shared by Satoru Yoshida, a commodities analyst at Rakuten Securities. “Brent could hit $ 90 a barrel by the end of this year as tension in world oil markets is likely to continue as US decarbonization efforts will limit production growth.”

Looking ahead to next year, Brent prices can stabilize around $ 85, according to UBS.

Oil prices remain in the zone of three-year highs

Even though Brent crude futures fell 0.6 percent they are still in the zone of highs of three years ago when they are around 85.28 dollars a barrel.

As for those of the West Texas Intermediate (WTI), a reference in the United States, the barrel for December lost 0.4 percent, to 83.09 dollars a barrel, also close to the highs of October 2014.

Factors that trigger the price of oil

Crude prices have risen as supply has narrowed.

The Organization of the Petroleum Exporting Countries (OPEC) increased supply by 40,000 barrels per day, but the market considers that it is insufficient to satisfy the synchronized increase of the demand in Asia, Europe and the United States.

This demand is produced by the reopening of the economy after the closures forced by the coronavirus.

But the global shortage of coal and gas also acts as a catalyst, which has driven the switch to diesel and fuel oil for power generation. To which were added the high gas prices.

Hurricane IDA, which paralyzed production in the United States, has also acted as a catalyst.