Moody’s Investors Service has predicted that oil prices will remain at $40-$60 per barrel in 2018 despite the extension of OPEC-led production cuts through the end of the year.
Moody’s stated this in its 2018 trend report for the global oil and gas industry. It noted that higher prices within or above that range would see supply grow as countries lessen their compliance with production quotas and US shale production continues to increase.
“Political unrest in the Middle East, alongside assumptions of OPEC extending its agreement to cut production, helped to bolster oil prices in late 2017,” observed a Moody’s Senior Vice President, Terry Marshall said.
He added: “Yet even with these factors offering a boost, prices will likely remain range-bound, and possibly volatile, on a combination of increasing US shale production, reduced but still significant global supplies, and potential non-compliance with agreed production cuts — especially if demand growth is more tepid.”