Oil price to average USD70/bl in 2018 - Danske Bank

Analysts at Danske Bank forecast oil price to average USD70 a barrel this year and USD73/bl next year. 

Key Quotes: 

“The oil price has risen noticeably of late and is now hovering some way above USD70/bl. Supply and demand are generally better balanced and global oil inventories have declined. The oil market could well tighten slightly in coming years, as demand should be supported by reasonable global economic growth and an expanding global population, while new investments in oil production are lagging somewhat. There are also a few pressure points, for example in Venezuela, where oil production is gradually falling, as the country cannot afford the investments needed to maintain production.”

“We have raised our oil price forecast to an average of USD70/bl this year and an average of USD73/bl for next year.”

“There is near-term risk that the oil price could rise somewhat higher than our forecast if the US reintroduces sanctions against Iran that hit the country’s oil exports. However, the high oil price could also prompt OPEC to announce a ramping up of production in 2019, which might cause the oil price to fall below our forecast.”