What Will Happen to Crude Oil Prices in 2018?
Nov 23 2017 Read 1263 Times
With 2018 just weeks away, the question on everyone's lips is how the crude market will fare in the New Year. Predictions are already being thrown around by leading analysts, with the US Commodity Futures Trading Commission recently releasing a report suggesting that crude hedge funds are turning bearish.
Meanwhile, the US Energy Information Administration has released a Short Term Energy Outlook report predicting that US crude oil prices could settle at around US$49.7 per barrel in 2017. This would represent a 1.7% rise from a previous survey commissioned in September. As a result, US crude oil prices could climb to an average of US$50.6 per barrel in 2018. Ultimately, this would see the market perform 2% higher than previous estimates.
The EIA has also mused that Brent crude oil prices could climb 2.7% to average US$52.43 per barrel in 2017. Looking forward to 2018, this could see Brent spike to US$54.07 per barrel. This figure would outperform crude for a 4.8% higher than previous appraisals.
Production cuts support crude recovery
So what's fuelling the positive outlook? Experts maintain that it's largely due to production cut deals from major producers. This includes embargoes from global giants like OPEC and NOPEC. Analysts also suggest that falling US and global crude oil inventories could help push oil prices up in 2018. Statistics back this up, with analysts reporting that US crude oil inventories recently fell by 120 million barrels. Key drivers include strong domestic demand for refined products, as well as an increase in crude oil exports.
Could DUCs jeopardise the market?
Of course, some critics warn that the USA's glut of DUCs (drilled uncompleted wells) will hinder the market recovery. Others maintain that even if the wells are completed, the output will be gradual. Furthermore, they will offset the fact that production from major fields like Eagle Ford and Bakken is currently in decline. In fact, the Permian Basin is the only region that's currently increasing output.
Together, these key patterns will support the crude market and help push up oil prices in the first half of 2018.
In an unstable market maximising profits is always front of mind. For a close look at the latest solutions 'Total Cost of Analysis in Petroleum Labs' explores how the concepts of "Total Cost of Ownership" and "Total Cost of Analysis" go way beyond the instrument itself.
Do you like or dislike what you have read? Why not post a comment to tell others / the manufacturer and our Editor what you think. To leave comments please complete the form below. Providing the content is approved, your comment will be on screen in less than 24 hours. Leaving comments on product information and articles can assist with future editorial and article content. Post questions, thoughts or simply whether you like the content.
In This Edition... Fuel for Thought - A good year for Endress+Hauser - Dr. Shah honoured by Society of Tribologists and Lubrication Engineers - DURAG Group acquire AP2E Analytical Instru...
View all digital editions
Jul 30 2018 Moon Township, PA, USA
Aug 06 2018 Westminster, CO, USA
Aug 09 2018 Madrid, Spain
Aug 27 2018 Stavanger, Norway
Sep 03 2018 Abu Dhabi, UAE