According to Michael Tran, our Global Energy Strategist, brent oil prices are in little danger of dipping below $US70 a barrel for the rest of the year and could leap higher given the rapid fading of the stock overhang that has been plaguing the market. It is also expected that US shale will no longer be a threat to prices for the rest of 2018 as pipeline bottlenecks in the prolific Permian basin region mean US production will "hit the wall" until new infrastructure comes online next year. A structural cycle of higher oil prices has kicked off, with the market likely to ebb and flow between periods of equilibrium and deficit, rather than the varying degrees of oversupply that have been typical recently.
In an article published by The Australian Financial Review, Michael further discusses his forecast of Brent oil prices and how external forces such as OPEC, geopolitical risks and potential trade wars will impact supply and demand.