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U.S. based Capital Economics, meanwhile, sees an average of $63 a barrel over the course of 2019. But some remain bullish yet — Japan’s MUFG views Brent and U.S. West Texas Intermediate (WTI) to be “oversold,” predicting a “sharp rebound” in coming months, while Societe Generale forecasts Brent at $73 for both 2018 and 2019. Richard Robinson, manager of Ashburton Global Energy Fund, believes the current dip is “transient” and that oil will recover to between $70 and $80 in the next three months, he wrote in a note earlier this month.
BAML’s forecast is supported by its outlook for global demand, which it expects at 1.3 million bpd, consistent with above trend global gross domestic product growth of 3.6 percent. But Goldman Sachs has a much darker forecast, expecting the U.S. to slow down to less than 2 percent by the end of next year, one of its senior strategists told CNBC on Monday. “As a result of that you could see the market getting quite scared,” the strategist said.
But as we go through seasonal demand peaks and the Iran sanctions waivers issued by Washington to 8 major oil-importing countries come off, “we will start to see the market tightening up,” Yazhari said, noting that the market has not felt the full impacts of those sanctions yet, designed to cripple the energy sector of OPEC’s third-largest producer.
“There are a number of factors to suggest the cuts were deep enough, that we will start to see a resumption to the upside in oil prices, but certainly we don’t see oil prices moving up to the $90, $100 level that maybe we could’ve seen,” the analyst said, adding, “We think that the only certainty is uncertainty at the moment.”
Brent crude was trading at $60.35, up .38 percent on the previous day, at 1 p.m. London time. WTI was at $51.55, up roughly half a percent.
—CNBC’s Tom DiChristopher contributed to this report.
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