Brent Crude To Average US$35-45 A Barrel Until 2018: Affin Hwang Investment

KUALA LUMPUR, March 18 (Bernama) -- Affin Hwang Investment Bank Bhd expects Brent, the global crude oil benchmark, to average between US$35 to US$45 per barrel (bbl) until 2018. Affin Hwang Investment in a research note Friday said the estimation was in line with the US Energy Information Administration's (EIA) projection that Brent crude price would average US$34/bbl this year and US$40/bbl next year. It said the EIA projection was driven by higher supply forecasts driven by non-OPEC production which is more resilient to lower prices than expected and lower demand forecasts on a weaker economic outlook. The research firm also believed that global crude prices would be constrained by the large inventory build-up and any further price increase could result in a significant response form US shale producers. However, the research firm said, EIA forecast non-Organisation of the Petroleum Exporting Countries (non-OPEC) production to decrease by 400,000 barrels per day (bpd) this year mainly driven by the decline in US shale oil production. "Non-OPEC production is expected to decline by a further 500,000 bpd next year helped by the decline in both US and North Sea production. "The reduction in non-OPEC reduction is expected to help mitigate the incoming Iranian oil supply, leading to the forecast global production growth of 700,000 bpd this year and 300,000 bpd next year," it said. Meanwhile, Affin Hwang Investment said global petroleum and other liquid consumption is forecast to grow by 1.1 million bpd this year and 1.2 million bpd next year, mainly driven by the expected demand growth in the US, Middle East, Africa, China and India. It said the higher growth in consumption would slow the pace of global inventory growth which is projected to increase by 1.6 million bpd this year and 600,000 bpd next year. -- BERNAMA