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JP Morgan: Brent prices to reach $65/bbl by 3Q2017

07 January 2017 [15:42] - TODAY.AZ

By  Trend


Price risks will increase if OPEC members aggressively deliver on their agreed cuts, according to the US JP Morgan bank.

Oil price movements still indicate that market consensus remains skeptical of the delivery of cuts by OPEC following their agreement last November, said the analysts.

JP Morgan said that the market rebalancing could already be underway, albeit not visibly, as adjustments occur in exporting nations domestic crude oil stocks.

“We retain the view that Brent oil prices will conceivably reach $65 per barrel by the third quarter of 2017, even if events thereafter undermine price gains by the end of the year,” said JP Morgan.

However, the analysts believe that among non-OPEC countries Russia is expected to implement the production cuts more slowly than OPEC members.

“It seems irrational for participants to cheat at the outset, as presumably failure to deliver will undermine prices by a similar amount,” said the US bank.

During the Vienna meeting held Nov.30, OPEC members decided to implement a new OPEC-14 production target of 32.5 million barrels per day. Later, non-OPEC countries agreed to cut the oil output by 558,000 barrels per day during the meeting held Dec.10.

Eleven non-OPEC countries agreed to reduce the oil output: Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and Republic of South Sudan.

OPEC and non-OPEC countries pledged to implement the reached deal from Jan.1, 2017.

URL: http://www.today.az/news/business/157526.html

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