Average prices for Brent for 2018 estimated at USD 55/bbl: Citi Research
In an interview to CNBC-TV18, Edward Morse, Global Head-Commodities at Citi Research shared his views and readings on the commodity market and spoke at length about crude.
According to him, commodity markets had a good 2017 and most of the commodities closing the year in positive even after profit taking.
He further said that we see robust global gross domestic product (GDP) growth in emerging markets.
Talking about crude, he said Organisation of the Petroleum Exporting Countries (OPEC) and Russia efforts have supported crude prices.
Morse said that the market rebalancing remarkably rapidly and rebalancing will continue into 2018 but not be sustainable beyond first quarter or first half of the year.
“We think that the high price that we have seen is giving rise to much higher growth from unconventional oil in the US and there is still a wave of investment that has reached final investment decision. Some of it in Brazil, some of it in Canada such that the supply side is likely to overwhelm these production cuts by the time the year reaches the third and certainly the fourth quarter of 2018,” said Morse.
He estimates an average prices for Brent for 2018 at USD 55/bbl.
Watch accompanying video for more details.