Gulf Intelligence: Oil to average in the US$50 per barrel in 2017

The average Brent oil price will be in the US$50s per barrel (/bl) in 2017, according to 49 per cent of the respondents to a GIQ Industry Survey of 250 energy national and international industry professionals. 

However, 29 per cent of respondents expect the price to be in the US$60s/bl range. This is in comparison to the US$30/bl this time last year, a 12-year oil price low. Nearly two thirds of the survey respondents (59 per cent) believe the price will no dip below US40/bl and a similar amount said that it would not rise above US$60/bl. However, 28 per cent of repsondents believe that at its peak, the price per barrel could rise to US$70 in 2017. 

The majority (74 per cent) of respondents said OPEC’s recent agreement to cut supply alongside non-OPEC producers, the first such deal in 15 years, represents OPEC’s flag of surrender after a two-year fight for market share.

"In a recent report, the Eurasia Group said that 2017 marks the most volatile political risk environment since the second World War. Given three political risk choices to rank in the survey, most GI respondents (65 per cent) said that US President Elect Trump’s ‘America First’ philosophy would have the biggest ramifications on the global energy industry. Nearly a third (27 per cent) said the likely overreaction by China to geopolitical events ahead of its 19th Community Party Congress leadership shuffle in September, will have the most significant impact on energy dynamics."

"On a longer-term basis, 48 per cent of respondents expect it to be sometime in 2018 before the inventories of crude and refined oil in industrialized nations – which remain 300 million barrels above their five-year average – to be cleared. A fifth (21 per cent) of respondents said late-2017 is more likely, while another fifth expect it to be in 2019."