Russia and Middle Eastern oil producers want to keep oil prices between $50 and $60 per barrel, according to the head of commodities at RBC Capital Markets, who suggested that U.S. supply is the real problem for the oil cartel.
Supported by a drop in U.S. fuel inventories, oil climbed further above $52 per barrel Friday amid plans from OPEC producers for a supply freeze agreement to help stabilize prices.
“I think that Saudi Arabia, OPEC and the Russians hope that yes some U.S. production will come back but $50 to $60 is probably not enough to resurrect the entire U.S. shale complex,” Helima Croft, managing director and global head of commodity strategy at RBC Capital Markets, told CNBC Friday.
“I don’t think they are aiming for $70 to $80, because I don’t think they want to bring it all back,” she said. Croft added that Russia and the Middle East want a “steady grind higher, not a gallop” in terms of prices.
In their most recent note RBC capital markets see WTI and Brent averaging $51 per barrel and $53 per barrel over the rest of 2016, before increasing to $56.50 per barrel and $59 per barrel on average in 2017.