INFLUENTIAL credit ratings agency Moody’s has raised its crude price forecast following moves by major exporters to cut production in a judgement that could help boost confidence among North Sea oil and gas firms.
However, it warned that increases in output in US shale areas could help keep a lid on prices.
Moody’s has changed its medium-term price band for crude oil to $45-$65 per barrel from $40-$60/bbl, citing continued OPEC-led production restraint and strong global demand growth.
The price peaked at $115/bbl in June 2014 before plunging as growth in global supplies ran ahead of demand.
North Sea oil and gas firms slashed spending and cut thousands of jobs amid the ensuing downturn.
Moody’s noted “Oil prices have firmed since OPEC’s November 2016 agreement to cut oil production by 1.2 million barrels per day (bpd) while non-OPEC members led by Russia agreed to cut production by 558,000 bpd.”
Brent crude fetched around $64.80 per barrel yesterday against less than $30/bbl early in 2016.
The agency noted strong compliance with the cuts agreed by OPEC to date.
But it cautioned: “Prices will remain range-bound, and possibly volatile, amid increases in US shale production; reduced, but still significant, global supplies; and potential noncompliance with agreed production cuts.”
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