Oil: Forecast revised up after Q2 moves – Danske Bank

According to analysts from Danske Bank, the OPEC will try to avoid a “taper tandrum“ in teh oil market. The forecast Breat at $72 a barrel by Q4.

Key Quotes:

“On 22 June, OPEC is set to meet to review production cuts. Recent comments from Saudi Arabia and Russia hinting that they could see a prospect for OPEC to start scaling back production cuts in H2 has brought downside risk to pricing back into focus in the market. It remains our view, that OPEC will do its best avoid an oil market ‘taper tantrum’, i.e. bring too much oil back to the market too fast. That said there will likely be a transition period of higher volatility where the market adjusts to a new OPEC strategy.”

“We maintain our forecast of the price on Brent at USD72/bbl in Q4 this year. We have revised up our price forecast for the whole year to USD72/bbl following higher prices in Q2 than what we had previously forecast. For 2019 we stick to our forecast of USD73/bbl. We will await further clarification on the ramifications of the Iran nuclear deal before taking that into account in our forecasts.”