Crude oil costs will rise to $70 a barrel subsequent 12 months, a number one consultancy predicts.
Capital Economics in London stated it has elevated its forecast to $70 a barrel from $65 as world oil provides might be constrained even because the world financial system picks up in 2020 as central banks maintain rates of interest low.
“We count on that world oil provide will stay constrained in 2020. However we additionally forecast considerably stronger development in demand subsequent 12 months and a pick-up in threat urge for food on the again of financial easing. In consequence, we’re elevating our forecast of the worth of Brent crude at end-2020 to $70 per barrel,” stated the agency’s Caroline Bain, including that it nonetheless doesn’t see any important enhance in demand.
It sees oil demand rising to 1.1m barrels a day, up from 800,000 barrels this 12 months.
“By March, costs are unlikely to be excessive sufficient to persuade OPEC that it ought to ramp up manufacturing. Furthermore, there seems to be little prospect of a lifting of US sanctions on Iran and Venezuela, which implies that their manufacturing and exports will stay low,” she stated.