(Reuters) - Standard Chartered on Tuesday raised its 2018 crude oil price forecasts by $10 saying that the market has began to acknowledge the importance of OPEC-led production cuts.
The British bank, which revised its forecasts for the first time in almost a year, saw Brent and WTI crude prices averaging $71 a barrel and $68 a barrel respectively this year.
It also raised its 2019 price outlook by $13 with Brent oil seen averaging $75 a barrel and WTI $71.
“OPEC and its non-OPEC partners are now receiving greater acknowledgment for market discipline, views of shale oil economics are no longer the most important price-setting factor, and demand pessimism is significantly reduced,” the bank said.
The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to cap output by about 1.8 million bpd in a deal running from January last year until the end of 2018.
OPEC oil output fell in March to an 11-month low due to declining Angolan exports, Libyan outages and a further slide in Venezuelan output, a Reuters survey found earlier this month, sending compliance with a supply-cutting deal to another record.
Oil prices were little changed on Tuesday after Brent hit its highest level since November 2014, supported by strong demand, OPEC-led production cuts, and the prospect of renewed U.S. sanctions on Iran. [O/R]
“Should the U.S. waiver on certain sanctions on Iran not be renewed in May, we are likely to roll our forecast back to where it was two years ago, to $75 per barrel,” the bank said.
Reporting by Vijaykumar Vedala in Bengaluru; Editing by Alexander Smith