Crude oil prices may be seeing the end of its faster-than-expected hike in the near term, said asset management firm Aberdeen Standard Investment.
“Going forward, we believe that global demand and supply numbers are pretty much lined up. We do believe that we will not get excessive pressure from demand outstripping supply,” Aberdeen Asia-Pacific head of multi-asset solutions Irene Goh said at the Diversification: Redefining Perspectives Investment Conference 2018 here today.
Aberdeen’s internal study estimates that the supply-demand gap, currently at around 600,000 barrels per day could actually be fulfilled by the Organization of the Petroleum Exporting Countries (OPEC).
“Towards the end of the year, we believe that OPEC has the capacity, ability and willingness to match up the global supply and demand for crude oil.
“We also expect bottlenecks in the US from supply to consumers to clear up gradually,” Goh said.
“All in all, we believe the supply situation will improve from here. We do believe that oil prices will not experience another surge going forward, it would be quite contained,” she added.
Brent crude prices have previously risen from its 2016 lows starting with an agreement to cut production initiated by OPEC.
That uptick was further supported by geopolitical tensions in the Middle East – the latest in supply concerns from Iraq, which has driven prices to hit its highest in nearly four years presently.
At press time, Brent crude was trading at just under US$90 per barrel from around US$66 per barrel in the beginning of 2018.
Source : hellenicshippingnews