NEW YORK, March 31 (UPI) — Movement in oil prices in early Thursday trading was influenced positively by bank forecasts, but dampened by supply-side strains brought on in part by Iran.
A survey by The Wall Street Journal of 13 investment banks finds the net consensus for Brent crude oil for the year is $40 per barrel on average, with West Texas Intermediate, the U.S. benchmark price for crude oil, trading at a $1 discount to Brent. The forecast represents an increase of $1 per barrel from a survey last month.
Oil prices have recovered from lows below $30 per barrel this year on modest recovery in the United States and in reaction to an April meeting between Russia and members of the Organization of Petroleum Exporting Countries. Major producers said that, with Iran’s return to the oil market this year and crude oil trading well below 2014 levels, considerations were needed for a freeze on output.
Iranian leaders said they’d attend the meetings in Doha to review market conditions, but have ruled out joining efforts to hold output steady at January levels. Most analysts reviewing the proposals for Doha said output is already high, suggesting the impact of a freeze would be muted.
Brent crude oil was making a run at $40 per barrel in early Thursday trading, moving up by 0.2 percent to $39.35 per barrel in the minutes before the start of the trading day in New York. WTI lost 0.8 percent to $38.02 per barrel on the last trading day in March.
Ratings agency Standard & Poor’s said earlier that, under the best-case scenario, it estimated Brent crude oil prices would average $40 per barrel for 2016, recovering only to the $50 mark by 2018.
On further supply-side pressure, the U.S. Energy Information Administration reported that, at 534.8 million barrels, domestic crude oil inventories “are at historically high levels for this time of year.” Crude oil imports into the United States were down by 636,000 barrels per day for the week ending March 25.
On production, EIA data show total U.S. crude oil output was down slightly from the previous week, despite an increase in production from Alaska. The less-volatile four-week moving average show total domestic crude oil production is down 3.7 percent from the same week in 2015.