HSBC: WTI oil to average $ 34.60 this year

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Expectations that the oil market would turn into a deficit in July prompted HSBC to revise upward its oil price forecasts for this year, with the US benchmark WTI Crude expected to average $ 34.60 per barrel .

The previous forecast from HSBC Global Research was $ 32.80 per barrel. The bank also raised its forecast for the average price of Brent crude in 2020 to $ 39 per barrel from $ 37 previously forecast due to record production cuts that are expected to tip the market into deficit next month.

“We believe the market is almost back to equilibrium in June and will turn into a deficit in July,” HSBC said on Monday, as reported by Reuters.

The oil market is expected to post a deficit starting in August, even after OPEC + has eased current cuts, analysts at Rystad Energy said on Friday. The upcoming market deficit this summer, however, does not mean that there will be a tightening of world oil supply, as stocks and floating storage have not yet started to run out.

Despite record cuts by the OPEC + group and production cuts linked to the economy in North America, the trend in oil prices remains uncertain because the path to recovery of global oil demand is still very uncertain, according to the bank. .

“We think this uncertainty is behind the latest OPEC + push; its goal of eliminating the surplus from the market is in sight, but the precise timetable is not yet clear, “said HSBC Global Research, quoted by Reuters.

OPEC + agreed on Saturday to extend record production reductions of 9.7 million bpd a month until the end of July, provided that all the countries of the pact respect their quotas 100% and compensate for the no -respect by exceeding the reductions July, August and September.

Early Monday, oil prices were down at 8:40 a.m. EDT, WTI crude trading at $ 39.15, down 1.09 on the day, and Brent crude down 0.35% to 42, $ 17, the OPEC + extension having been largely integrated into the market rally on Friday. and as Libya has confirmed the restart of its largest oil field after six months of blockade.

By Tsvetana Paraskova for Oilprice.com

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