$100 per barrel oil ??

Crude oil prices are set to continue rising after Brent crude vaulted over $US80 a barrel this week – and forecasters are not ruling out the price hitting $US100 a barrel.

“It would be easy to imagine that oil could rise to $US100,” said HSBC chief economist Paul Bloxham. “We have a forecast that sees oil prices climbing. In 2020 we expect Brent crude to average $US85 a barrel.

“We don’t think it would be hard to see oil prices rising higher than our forecasts and we’re happy to characterise the risks as tilted to the upside.”

 Bank of America Merrill Lynch analysts lifted their average Brent crude oil price forecast for 2019 from $US75 a barrel to $US80 a barrel citing cuts to Iran’s output as the most important catalyst for the change.

Morgan Stanley strategist Martijn Rats reiterated in a note last week that he expected Brent crude to hit $US85 a barrel in the coming months and said that it could climb as high as $US105 by 2020. “In coming months, our modelling suggests further inventory draws globally,” he said.

Stephen Innes, OANDA’s head of trading the Asia Pacific, said OPEC’s unwillingness to make any major changes to production before December made for a convincing bullish argument.

“With OPEC showing little inclination to add amounts anytime before the December 3 summit, it’s very likely, in the absence of any about-face from OPEC, that Brent could trade to $US85 plus and WTI [West Texas Intermediate] $US75 plus ahead of the November 4 Iran sanction date as bullish expectations should continue to boil,” he said.

“But when taken in combination with the fact US commercial crude oil inventories are at their lowest since early 2015, it makes for a convincing bullish argument.”


The Australian Financial Review

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes