The oil price has moved higher Thursday, following news that global ratings agency Moody’s, raised its price outlook for the precious commodity. Moody’s now expects the oil price to be in a band of $45-65 per barrel, up from a previous assessment of $40-60 per barrel.
By around midday, the price of Brent crude was 0.28% higher at $65.07. The price of WTI crude, meanwhile, was up 0.48% at $61.25.
Global demand rising
In its latest report, Moody’s said it had raised its medium-term price band for oil, amid ongoing OPEC restraint and signs of rising global demand for the commodity.
“Prices in the upper half of the oil price-band will encourage increased supply as US production grows and countries reduce compliance with their production quotas,” said Terry Marshall, a Moody's Senior Vice President.
“Nevertheless, even with crude prices at the higher end of the new $45-$65 range in early 2018, we expect prices to stay within this range over the medium term amid better balance between increased production and growth in demand,” Marshall said.
Moody’s also maintained its price band on North American natural gas at $2.50-$3.50 per million British thermal units (MMBtu). It also raised its band for natural gas liquids (NGLs) to $20-$30/bbl, from $19-$27/bbl, previously.
US shale oil production rising
Separately, in its monthly oil market report, OPEC has said that US shale oil production has already surpassed the December forecast and is set to rise further in the second half of 2018.
“Shale is capable of further escalation in output in the second growth phase,” OPEC said.
“Since September 2017, US shale firms had focused more on well completions to raise production rather than drilling new wells until January 2018. The increase of the rig count by 35 units in February leads to an expectation of a likely hike in drilling activity going forward,” the report said.