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Page added on May 12, 2018

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Crude Oil Price Forecast: $100 per barrel by 2019

Consumption

It was a busy week for oil traders, with prices moving in a $4.25 range of $71.89 per barrel down to $67.63 per barrel as the market digested the news that U.S. President Donald Trump decided to unilaterally pull out of the Iran nuclear deal and reimplement economic sanctions. The exchange of airstrikes between Iranian-backed rebels in Syria and Israel also added to the market tension.

Traders are concerned that renewed sanctions could lead to a loss of crude oil exports from OPEC’s third largest producer. The return of sanctions could result in a reduction of oil exports from Iran by 200,000 barrels per day (b/d) to 500,000 b/d by the end of the year, and another 500,000 b/d to 700,000 b/d in 2019, according to S&P Global Platts. U.S. sanctions are set to take effect in November, giving market participants some time to source new supplies. China is the most significant single buyer of oil from Iran at about 700,000 b/d. South Korea comes in second at a little over 250,000 b/d.

Disruption in Iran could force OPEC to adjust up production levels earlier than it had expected and could prompt U.S. shale drillers in West Texas to drill more. Despite these efforts to fill in for lost supply, analysts at Bank of America still expect oil to reach $100 per barrel in 2019.

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OPEC and IEA Reports Up Next

On Monday, traders and analysts will get a look at the latest OPEC monthly oil market report. Key data to watch for are any additional upward revisions to world oil demand. Last month, OPEC revised 2018 world demand growth to 1.63 million barrels per day. Total demand for the year is forecast to average 98.7 million barrels per day. Traders will also be looking at OPEC’s world supply expectations. In last month’s report, OPEC said that it expects non-OPEC supply to grow by 1.71 million barrels per day in 2018, with the U.S. accounting for most of the supply growth.

Chart showing crude oil supply changes by country

OPEC does not publish its supply growth forecasts but did say last month that OPEC crude production in March decreased by 201,000 b/d to average 31.96 million b/d. OPEC’s share of the global output continues to fall as the cartel takes barrels off the market to relieve a global supply glut that caused oil prices to tumble a few years ago. OPEC market share now stands at 32.6% but could go in either direction depending on the cartel’s response to Iranian barrels coming offline later in the year.

On Wednesday, the IEA will publish its monthly oil market report. Traders will again look for changes in supply and demand expectations. Last month, the IEA left global demand forecasts unchanged in 2018 at 1.5 million b/d, slightly less than OPEC’s expectations. The IEA says non-OPEC supply is set to grow by 1.8 million barrels per day in 2018, somewhat more than OPEC’s expectations. As it stands now, OPEC seems to be expecting a tighter market in 2018 with higher global demand and lower non-OPEC supply growth. Traders could anticipate additional upward price momentum if the IEA’s views come more in line with OPEC.

Technical Picture Looks Strong

The technical chart for oil still looks healthy in the long run. A weekly chart shows a well-established uptrend despite last week’s volatility that left long wicks (or shadows) in the weekly price action.

Chart showing the performance of crude oil

The daily price chart is more mixed, however, with the completion of a Doji Star Bearish Reversal candle last Thursday. Prices struggled for direction on Thursday, resulting in a Doji candle, and closed lower on Friday. This scenario generally shows an erosion of confidence in the current uptrend that could extend into this week. Contrasting the emerging candlestick patterns is a strong vote of confidence from a mix of technical indicators and moving averages. Daily technical indicators all indicate bullish sentiment confirmed by short- and long-term moving averages.

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18 Comments on "Crude Oil Price Forecast: $100 per barrel by 2019"

  1. Duncan Idaho on Sat, 12th May 2018 7:33 pm 

    Agree—
    Late 2018, early 2019 we should see the results.

  2. makati1 on Sat, 12th May 2018 8:18 pm 

    “Crude Oil Price GUESS: $100 per barrel by 2019, Maybe?”

    There! Fixed it! Meanwhile in America:

    “Eleven Lies About Iran (That Americans Won’t Quit Lying About Because Stupid Is An American Specialty).”

    Lie #1 “The Iranian regime is the leading state sponsor of terror” (No, America is.)

    https://www.theburningplatform.com/2018/05/12/eleven-lies-about-iran-that-americans-wont-quit-lying-about-because-stupid-is-an-american-specialty/#more-176096

    You can see how the Us propaganda goes on from that blatant lie by reading the article. Lies are all the Us has left these days.

  3. Bloomer on Sat, 12th May 2018 8:22 pm 

    Suppose the Iranian oil buyers don’t fall in line with the US sanctions? Oil prices won’t take off, they will likely drop.

  4. makati1 on Sat, 12th May 2018 10:39 pm 

    Bloomer, it will be interesting to watch and see who kisses the imperial ass. America is isolating itself more and more.

  5. Plantagenet on Sat, 12th May 2018 11:33 pm 

    Personally, I’m looking forward to $100 bbl oil. Oil is a finite commodity and it should be priced higher then it has been for the last several years.

    Cheers!

  6. Outcast_Searcher on Sat, 12th May 2018 11:56 pm 

    Why don’t these technical chart clowns just trade on their profound knowledge and price predicting ability and become MASSIVELY rich instead of working for some company for a small salary or writing a blog hoping for subscriptions?

    Because their predictions are WORTHLESS on average.

    I’m actually all for $100 oil, as it would help out HEV’s, PHEV’s, and BEV’s by making them more cost competitive.

  7. Outcast_Searcher on Sat, 12th May 2018 11:58 pm 

    Plant, everything on earth is a finite resource. Does that mean everything on earth should be priced higher than it is, no matter how highly it’s priced?

  8. makati1 on Sun, 13th May 2018 12:21 am 

    BINGO! Outcast. I ask the same question of economists, financial advisors and all others who profess to know what will happen. Apparently they are just snake oil salesmen preying on the stupid/gullible.

    Must be difficult to read chicken guts and get rich…lol

  9. makati1 on Sun, 13th May 2018 2:15 am 

    As the empire crumbles around the tax slaves…some topics to copy and paste on your search engine.

    “An Audible Gasp” Was Heard When The Chicago Fed Unveiled Its “Solution” To The Pension Problem” More taxes!
    “Trump’s Pyrrhic Victory: The US Opts For A Path That Can Only Lead To War” Invest in body bags.
    “Kansas Police No Longer Allowed To Have Sex With People They Pull Over:” Awww! Bummer!
    “Congress Is Planning To Spend Millions On Search For Aliens, UFOs” More of your tax money at work.
    “‘Murdaland’: Baltimore Homicides For 2018 Spike At “Second-Fastest Pace In A Decade”
    “We’re All Trespassers Now In The Face Of The Government’s Land Grabs”
    “School Calls Police on Student Who Made Gun with Legos”
    “Should Americans Die For Israel?” Only Jews.
    “Student debt just hit $1.5 trillion” The taxpayers will bail them out.

    And finally…For MM

    “A growing share of millennials are living with mom” LMAO

  10. Davy on Sun, 13th May 2018 4:40 am 

    “I’m actually all for $100 oil, as it would help out HEV’s, PHEV’s, and BEV’s by making them more cost competitive.”

    With inflation $100 oil is not what it was in 07 and 11 but it still will be a drag on the economy in general. Considering rates are rising a bit and easing being reduced this oil price rise may not be sustained. People who think it will help out EV’s and renewables may see an offset. Less economy will pressure while higher price will stimulate.

  11. Davy on Sun, 13th May 2018 4:42 am 

    “And finally…For MM “A growing share of millennials are living with mom” LMAO”

    You are living in the granny wing by your own admission.

  12. Davy on Sun, 13th May 2018 4:43 am 

    3rd world, do you have links for all your headlines? More intellectually lazy behavior from 3rd world.

  13. Cloggie on Sun, 13th May 2018 4:45 am 

    I hope $100 oil will happen. Good for the environment, good for European renewable energy industry, good for Russia.

  14. Davy on Sun, 13th May 2018 5:02 am 

    Good for parts of the American economy too or did that part cause you blindness?

  15. Dredd on Sun, 13th May 2018 5:40 am 

    The true cost of oil includes climate catastrophe costs.

    So, sue the bastids:

    U.S. District Court Judge William Alsup, who is hearing a suit brought by the cities of Oakland and San Francisco against five big oil corporations, ordered a historic tutorial in which both parties will have a chance to present their view of the science behind climate change, the McClatchy Washington Bureau reported March 7.

    This will be the closest that we have seen to a trial on climate science in the United States, to date,” Michael Burger, head of the Sabin Center for Climate Change Law at Columbia University, told the Bureau.

    (https://blogdredd.blogspot.com/2018/03/oilfluenza-affluenza-and-disgorgement-3.html“>Oilfluenza, Affluenza, and Disgorgement – 3).

  16. Bronzetti on Sun, 13th May 2018 7:27 am 

    You all are laughable. You predict doom in many different fashions and are always switching between methods that it will come by (North Korea, Iran, China, peak oil, global warming, Russia) and while all of those can be threats, save peak oil, we have dealt with them fairly well and will continue to do so.

  17. Davy on Sun, 13th May 2018 8:11 am 

    Yea, bro, for how long will they be dealt with fairly well? Until the end of time? Who is funny?

  18. Brent Georgeson on Sun, 13th May 2018 11:44 am 

    Bronzetti

    Yeah oops my bad I did not realize that everything is amazingly wonderful out there and there is nothing for me to see. Thank you for showing me the fallacy of my ways. Anybody who truly believes this is a fool.

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