The oil price could climb as high as $100 per barrel in 2019 amid a combination of geopolitical developments. At least that’s what Bank of America analysts have said in their recent commodities report.
The report comes as the price of oil has been moving higher following US President Donald Trump’s decision to formally withdraw from the Iran nuclear agreement and impose fresh sanctions on the oil producing country.
However, Iran remains upbeat on its oil production and supply abilities despite that development.
The oil price is broadly higher, with Brent Crude at around $77.33 per barrel, while the price of WTI crude is $71.40, per barrel.
Bank of American oil price forecast
The Bank of America has raised its oil price forecast from an average of $64 per barrel to $70 per barrel in 2018 and from $60 per barrel to $75 per barrel for 2019.
And that’s not all. The bank’s analysts anticipate the price of Brent crude could hit $90 per barrel in the second quarter of 2019, with the possibility of it temporarily hitting $100 during the first half of next year.
“Looking into the next 18 months, we expect global oil supply and demand balances to tighten driven by the ongoing collapse in Venezuelan output,” BOA analysts wrote.
“In addition, there are downside risks to Iranian crude oil exports. Plus we see a high likelihood of OPEC working with Russia in 2019 to set a floor on oil prices,” they said.
Iranian oil outlook
The broader outlook for Iranian oil production and exports is on the downside, particular as fresh US sanctions have yet to be imposed on the region. However, Iran itself is reportedly upbeat on its oil export prospects.
According to a Reuters report, the Iranian oil minister Bijan Zanganeh is not expecting any new US sanctions to affect its oil exports.
“Trump’s decision will not have any impact on our oil export,” minister Zanganeh is quoted as saying on Iranian state television.