File pic: A pump jack lifting oil out of a well, during a sandstorm in Midland, Texas, April 13, 2018. - Reuters)
KUALA LUMPUR: S&P Global Ratings has revised the benchmark Brent crude forecast to US$70 per barrel in 2019 as it is unlikely to hold firm above US$80, weighed by supply concerns.
Asia Pacific Corporate Ratings Director Bertrand Jabouley said it was a matter of time before oil producers started pumping up their oil production capacity and flood the market with the commodity, particularly in the current high price environment.
“Our earlier forecast for 2019 was US$65 per barrel. Meanwhile for 2020, we foresee Brent crude to hit US$60 per barrel,” he told a media briefing on ASEAN Credit Spotlight here today.
Brent crude oil futures rose to US$83.25 per barrel today, up 0.63 per cent from its last close.
“Looking at the Brent crude futures curve, it remains on a downward trend, not to mention, traders and oil professionals are a little bit sceptical about the ability of oil prices to hold firm,” he said.
Jabouley also noted that break-even production cost continued to be a global key issue in the sector, given the fact that a number of US shale oil producers managed to work and reduce their break-even cost.
“As for demand, it will not be an issue and we are positive about the demand in the market,” he added. - Bernama
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