Credit Suisse raises 2018 oil price outlook on strong OPEC compliance

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Dec 7 (Reuters) - Credit Suisse on Thursday raised its 2018 oil price forecasts citing strong OPEC adherence to pledged output cuts which the bank says could normalise OECD inventory levels next year.

"We continue to model a high level of compliance to the ceiling that was implemented in January 2017 until the OECD crude inventory balance reaches its 5 year average, which we model will occur in 3Q 2018," analysts at Credit Suisse Equity Research said in a note.

Better demand growth along with supply disruptions from Nigeria, Libya and Venezuela and tensions in the Middle East would likely accelerate the rebalancing process, the bank added.

Credit Suisse raised its 2018 Brent price forecast to $60 from $53 per barrel and its WTI forecast to $56 from $50.50 per barrel.

The bank, however, lowered its natural gas forecast as improved long-term demand growth is expected to be offset by strong supply.

Production in the lower 48 U.S. states needed to meet that demand averaged an all-time high of 76.1 bcfd over the past 30 days, Reuters data showed.

The bank cut its 2018 natural gas price forecast to $3.10 per million British thermal units (mBtu) from $3.50 per mBtu and its long-term price forecast to $3.00 from $3.25 per mBtu.

This article appears in: Politics , Stocks , Commodities

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