A survey by the Wall Street Journal shows that investment banks have raised their oil forecasts for the fourth month running
The WSJ polled 15 investment banks at the end of January, and their forecasts showed that Brent will average $61 per barrel in 2018 - higher than the $58 forecast in the December poll.
Meanwhile, they also revised their forecast for WTI higher by $3 as well to average at $57 per barrel for the year.
But they do expect prices to possibly fall in the second half of the year, as higher prices are stimulating US shale drillers to ramp up output and that could potentially strain the current coalition between OPEC and producers involved in the production cap deal.
Here are some of the feedback from the report:
BNP Paribas
Oil has benefited from the increased risk appetite, but the recent advance in oil prices inevitably raises the question of the magnitude of the supply backlash in 2018, notably from U.S. shale producers.
Barclays
In Venezuela, oil supply disruptions have moved from a risk to a reality, and we believe the situation could worsen. The market is dangerously focused on newly published backwards-looking data and, in our view, is not paying attention to the stockbuilds that are likely to emerge later this year and in 2019.
Brent is currently trading at $67.81 per barrel, down by 1.12% on the day, while WTI is at $64.77, down by 1.04% on the day. The hammering in equities is hurting global sentiment, and commodities is no exception from that as well - in particular, oil.
