STATOIL SEES $60
REUTERS - The balance between demand and supply in the oil market will shift earlier than previously expected due to OPEC's output cuts, with prices heading towards $60 a barrel next year, Statoil's chief executive said on Tuesday.
Brent crude futures LCOc1 hit $55 a barrel on Monday, the highest level since July 2015, after OPEC agreed on Dec. 1 to curb production by 1.2 million barrels per day (bpd) from January.
"It means that the rebalancing of the market can come at an earlier point in time than we previously expected," Statoil chief Eldar Saetre told Reuters on the sidelines of an energy conference.
"We basically have indicated that the rebalancing will start at some point during 2017. I think this (OPEC agreement) will push it to the front of 2017 as this agreement comes into effect," he added.
As a result of demand catching up with supply, oil prices are expected to rise to towards $60 a barrel, spurring more oil production from U.S. shale.
"There will be volatility, and at some point we will see higher prices driven by lack of investments," Saetre said, adding that increased output from the U.S. will not be enough to compensate for historically low global investments.
"At some point we will see higher prices (than $60 a barrel)... because of deferred investments, but I don't think you will see the impact of this next year, because the time horizon is longer," Saetre said.
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REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.
EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.