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Oil could hit $100 a barrel in 2019: Bank of America

Business | 2018-05-10 22:04:00
Oil could hit $100 a barrel in 2019: Bank of America
There is a risk of crude oil prices hitting $100 per barrel next year due to tightening of supply and demand balance in global oil market, investment banking giant Bank of America Merrill Lynch said in a report Thursday.

Oil prices have been rising in the past few weeks due to worries over the possibility that the U.S. could reimpose sanctions on Iran, which would then hinder Tehran's ability to export oil and create disruption in the global supply.

After President Donald Trump announced Tuesday that he would withdraw the U.S. from the Iran nuclear deal, crude oil prices reached new highs since November 2014.

International benchmark Brent crude climbed as high as $77.97 per barrel on Thursday, while American benchmark crude reached as much as $71.88 a barrel.

Bank of America said in the report that it forecasts Brent crude to average $70 per barrel in 2018 and $75 a barrel in 2019.

"We also introduce a second quarter $90 per barrel Brent price target for 2019 and see a risk of $100 per barrel oil next year," Francisco Blanch, head of commodities research at Bank of America Merrill Lynch, wrote in the report.

“Looking into the next 18 months, we expect global oil supply and demand balances to tighten,” he added.

As for the main reasons of price increase, the report pointed out to rising global oil demand, falling crude oil production in Venezuela and possible crude export decline from Iran.

"If a new Iran deal is not reached in the next six months or OPEC/Russia extend production cuts into 2019, global oil markets would likely tighten further,” the report said.
Anadolu Agency
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