OPEC may extend cuts by 3-6 months, crude prices to further gain: XM Aus
The crude oil prices are trading off their two year highs ahead of the Organization of the Petroleum Exporting Countries (OPEC) meeting on Thursday.
Throwing more light on what could happen in the meet, Peter Mcguire, CEO, XM Aus told CNBC-Tv18 that one could see output cut extensions by OPEC by 3-6 months and crude prices could see further gains in near-term.
If OPEC extends cuts, WTI crude could surge to USD 59-62 per barrel and the Brent prices may surge to USD 67-68 per barrel.
However, if they do not extend cuts, then there could be 7-8 percent correction in prices of crude, and it could go back to the range bound volatility, said Mcguire.
According to him, OPEC meeting in May 2018 would be more crucial with an eye on positioning of Russia and Saudi Arab.
If crude prices spike up then it will no doubt attract more shale producers coming on line in US, he said. On the other hand, there will be the IPO of Saudi Aramco sometime in 2018.
The oil producers must also watch out for the rolling out of electric vehicles and keeping a keen on watch on dollar movement in 2018 is also very important, said Macguire.
On the metals, he said nickel is still underpriced and so there could be more upside for that. Similarly, copper and other metals may also see more strength in 2018, he said.