The oil price is a little higher Tuesday, following comments from IHS Markit’s oil markets VP suggesting it could increase further to around $10 per barrel by the end of 2018. However, once the oil price hits that level, it could slide sharply to around the $60 per barrel level by the end of 2019.
At around 1400 BST, the price of Brent crude was 0.54% higher at $72.60 per barrel. The price of US WTI crude, meanwhile, rose 0.69% to $65.87.
Oil price forecast
Speaking at a press conference at the opening of the Asia Petrochemical Industry Conference 2018, IHS Markit’s oil market VP Victor Shum, said that he anticipates the price of Brent crude to move higher over the second half of 2018.
He expects the oil price to move up to between $75 and $85 per barrel slowly. However, it could then rise sharply to hit $100 per barrel before the year is over.
“We expect the average Brent price to chart about US$78 a barrel in the second half of this year and quite likely there will be some volatility and it will hover around US$75 to US$85 a barrel,” Shum said.
“With the unpredictable US President Donald Trump administration, we could envision a scenario where the oil price could hit US$100 a barrel and with the Iranian and Venezuelan output significantly reduced and no spare production capacity left from major Arab producers,” he added.
“We can expect a major disruption of Iranian oil production with less crude supply from Iran and we may face a tighter crude oil market due to shrinking spare production capacity by the end of this year,” Shum told his audience.
However, while Shum is anticipating upside in the next few months, over a longer time frame, he said the price of crude oil could fall to below the current levels.
Future potential geopolitical issues, possible relating to the Iran sanctions, could then lead to a decline in the oil price to around $60 per barrel by the end of 2019 or early in 2020.