A survey showed on Monday that oil market analysts expect crude oil prices to rise at a steady pace this year but remain limited, because of the rise in US crude oil production and the supply constraints imposed by the Organization of the Petroleum Exporting Countries (OPEC).
According to "Reuters", the survey, which included 37 economists and analysts, indicated that the world's benchmark Brent crude is expected to average $ 63 a barrel this year, slightly higher than a previous forecast of $ 62.37 a barrel.
Ashley Petersen of Stratas Advisors Energy Consultancy said, "The level of OPEC's commitment to agreed production cuts and the growth rate of oil production is expected to be the keys of price-driven in 2018. Prices are likely to be more volatile in 2018 than in 2017 due to negative sentiment on the pace of US growth."
US production could exceed 11 million barrels per day this year as production already approaches a record high of more than 10 million barrel per day. Kalin Berch, an analyst at the Economist Intelligence Unit, stated, "The oil market is dominated by a large number of private companies that are not subject to coordination, many of which benefit from lower production costs than producers in other regions. It means that the United States will remain a major player in the foreseeable future."
At the same time, figures for OPEC's head of research showed this month that the Organization was nearing its goal of reducing oil stocks in industrialized countries to an average of five years.
This week, Saudi Arabia hoped that OPEC and independents could ease production constraints next year and create a permanent framework for oil market stability after the agreement expires.
Analysts believe that unless there is a smooth exit from the deal, global inventories may fall sharply so as to hurt prices. The growing demand from the Asian economies led by China is expected to absorb the increase in the US supplies. "The Rising global demand for oil will be driven mainly by emerging markets in 2018 and 2019 and will be the fastest pace since 2013," Berch said.
The average price of US light crude is expected to hit 58.88 dollars per barrel in 2018, up from 58.11 dollars a barrel in the January survey.