An historic agreement between OPEC countries and other oil producers to reduce their output won’t be enough to nudge crude prices above $60 a barrel this year, according to energy lender Arab Petroleum Investment Corp.
Most of the oil projects planned over the next decade are economically viable with prices below $60 a barrel as explorers succeed in squeezing costs, consultant Wood Mackenzie Ltd. said.
Crude oil will rise to a range of $50 to $60 a barrel until at least 2018 as demand increases and markets absorb an oversupply that’s led to lower prices over the last two years, according to the acting oil minister of OPEC member Kuwait.
Crescent Petroleum Co., an oil and natural gas producer in Egypt and Iraq, expects crude prices to improve this year as supply becomes more in line with demand.
The United Arab Emirates’s economy minister joined forecasters looking for $60 crude this year with demand and production moving more in line.
A massive truck bomb exploded near a police base in the western Libyan town of Zliten, killing at least 60 police officers and wounding around 200 others, officials have said. No group immediately claimed responsibility for the attack but a local Islamic State affiliate has been trying to gain a foothold in Zliten, spreading westward from its central stronghold of Sirte along the North African country’s coast.
Brent slid below $60 a barrel for the first time since April amid speculation Greece’s rejection of austerity measures will prompt its exit from the euro area. Futures dropped as much as 1.6 percent in London, falling for a second day. Sixty-one percent of voters backed Prime Minister Alexis Tsipras’s rejection of further spending cuts and tax increases. U.S. Secretary of State John Kerry tempered expectations that a nuclear deal with Iran is imminent as diplomats meeting in Vienna work toward a Tuesday deadline. Oil last week slumped the most since March amid speculation the Greek crisis threatens Europe’s economic stability and growth, prompting investors to eschew riskier assets. Iran, the fourth-largest member of the Organization of Petroleum Exporting Countries, has estimated it could double crude exports from about 1 million barrels a day within six months of sanctions being lifted. “We’ve seen a bit of a capitulation in oil,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “The situation in Greece has a confidence impact on demand. A nuclear agreement with Iran represents a negative risk event for oil in terms of the possible significant increase in supply.”
Oil held losses below $60 a barrel as near- record U.S. production prolonged an oversupply amid the lowest trading volatility in eight months. Futures were little changed in New York after declining 1 percent on Thursday. U.S. crude stockpiles remained 84 million barrels above the five-year average for this time of the year while the nation pumped near the fastest pace in more than three decades of weekly government data. A measure of price fluctuations in West Texas Intermediate dropped to the lowest level since Oct. 29.
Oil traded near $60 a barrel before U.S. government data forecast to show crude stockpiles in the world’s biggest consumer declined for an eighth week. Futures dropped as much as 0.7 percent in New York. Crude inventories probably shrank by 1.5 million barrels through June 19, according to a Bloomberg survey before an Energy Information Administration report Wednesday. Iranian and European officials accused each other of backing away from a nuclear agreement as a June 30 deadline for an accord approaches.