Thursday, June 24, 2021

    BoA analysts see oil price hit $100 per barrel 2019 on disruptions of output, export in Venezuela, Iran

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    Naija247news Media, New York
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    The collapsing oil production in Venezuela and potential export disruptions in Iran could push the price of Brent crude as high as $100 per barrel in 2019, analysts at Bank of America Thursday.

    The analysts said their target price for Brent, the global benchmark, was $90 for the second quarter of next year. But they warned there was a risk that deteriorating conditions in Iran would push prices to $100, a level not seen since 2014.

    They expect West Texas Intermediate, the most commonly cited US contract, to trade $6 below the price of Brent in 2019.

    President Donald Trump’s decision to exit the Iran nuclear deal has already pushed Brent prices above $77 per barrel. Prices have gained over 8 percent over the past month and 15 percent since the beginning of the year.

    Investors are worried that renewed sanctions on Iran, a major oil producer, could lead to supply disruptions.

    Trump vowed on Tuesday to impose “powerful” sanctions on the OPEC nation, which has the fourth largest crude oil reserves in the world.

    After sanctions were eased as part of the nuclear agreement, Iran ramped up production to about 3.8 million barrels a day. That’s about 1 million barrels a day more than in early 2016.

    Another factor that’s helping to reduce supply is an agreement between OPEC and other major producers including Russia to slash output.

    The deal is set to expire at the end of 2018, but the Bank of America analysts said that OPEC and Russia are likely to continue working together to prevent prices from falling.

    At the same time, the analysts said the global economy is growing at a healthy pace and supporting higher demand for oil. The extra demand is helping to wipe out an oil glut that has plagued markets.

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