Brent prices have not deviated by more than $5 from $50 since the first quarter of 2016 on a quarterly basis, but Hurricane Harvey will test that rangebound trend, said Barclays, a leading British financial services provider.
The storm damaged the nexus between tight oil and the global market, exposing the market to more violent price swings in the remainder of the year.
"We continue to see Brent prices at around current levels of $54 per barrel in Q4, but would sell any rally in excess of those levels. Moreover, we do not expect the recent bout of positive market sentiment to last through the end of the year," Barclays said.
"Based on the extremely low call on US tight oil supplies implied by our balance for 2018, we remain extremely sceptical of substantially higher prices next year.
"There are some green shoots. Unrest in Iraq and Venezuela should keep output there in check, regional crude oil contangos have dissipated, and stocks are gradually declining. But a softer market balance is in store for next year, which should ensure an Opec/non-Opec deal remains in place beyond March 2018," it added. - TradeArabia News Service
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