Oil prices could reach US$60 a barrel before the end of the year due to rising global demand and reduced supply from the Organization of the Petroleum Exporting Countries, according to a report.
Barron’s, citing research from Citigroup senior energy analyst Eric Lee, who previously called for a bear market in oil when the price was above US$100, said prices are expected to rise now, Reuters reports.
The decline in recent weeks to a low of just over US$44 for Brent crude, the international benchmark, has made Lee a short-term bull.
The analyst projects demand of 97.3 million barrels a day in 2017, a record high, up from 96 million in 2016, driven largely by emerging market countries such as China and India.
Simultaneously, reduction in supply from OPEC of about 0.7 million barrels a day versus the 2016 average should drive the price up before the end of the fourth quarter.
A decline in global oil inventories began after the first quarter, and Lee projects that it will continue at an accelerated rate through the end of this year, according to Barron’s.
Following the jump to US$60 Lee expects prices to remain flat heading into 2018, as the supply side catches up with demand.
Barring major political disruptions from petroleum-producing nations, he expects the price of crude probably will not rise much above US$60.
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