Oil analysts still expect a rise in the crude price this year, thanks to improving demand growth that should help offset any bearish headwinds from a stubborn supply surplus, a Reuters poll showed on Friday.
A survey of 29 economists and analysts forecast Brent crude will average $45.51 per barrel in 2016, up marginally from last month’s forecast of $45.20, and about $3.55 higher than the $41.96 average so far this year.
“We project solid global demand growth in 2016 (1.4 million barrels per day), and a reasonable growth in 2017 (+1.1 MMBbl/d), mostly driven by China, India and Africa. As such, demand should help to drive prices higher,” said Raymond James analyst Luana Siegfried.
This is the fifth straight upward revision in forecasts for the North Sea crude benchmark.
Oil prices are still some 60 percent above the near 13-year lows seen in January this year, but have retreated from 2016 highs above $50 a barrel, as a growing glut of refined products could force more unwanted crude into storage, analysts said.
Global supply is still greater than demand, but production disruptions, often through geopolitical instability, have helped to erode part of the prevailing overhang, according to Giorgos Beleris, analyst at Thomson Reuters’ Oil Research and Forecasts.