UNITED STATES (OBSERVATORY) – Barclays on Thursday raised its forecast for the benchmark Brent crude to 68 from $ 62 a barrel in the second quarter and raised its forecast for 2018 and 2019 by $ 3 to $ 63 and $ 60, respectively.
For WTI, Barclays expects the average price of a barrel at $ 58 for 2018 and $ 55 for 2019, which also increased by $ 3 a barrel from previous estimates.
Barclays analysts said in a note: “In the short term, prices will continue to benefit from an ideal storm of production stagnation, geopolitical risks, and a more severe winter, which depletes the level of crude stocks and makes ‘restoring balance’ close to reach.”
Brent and Western Texas crude hit their highest level since late 2014 at $ 73.09 and $ 67.45 a barrel, after Saudi Arabia said it intercepted rockets over Riyadh. US President Donald Trump warned Russia of imminent military action in Syria.
But Barclays says the second half of 2018 could see a downward correction due to a variety of factors, including rising US production and the likely decline in supplies from Iran and Venezuela.
US President Donald Trump has given European countries signatory to the nuclear deal with Tehran a deadline of May 12 to “redress the terrible flaws” of the nuclear deal in 2015, otherwise he will refuse to extend the lifting of sanctions on Iran.
“It should be noted that in both countries (Iran and Venezuela), a scenario with great difficulties has been put into consideration pricing already,” Barclays said.