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Global oil prices to recover beyond Q1 - report

Global oil prices to recover beyond Q1 - report
Photo Credit: Arabianeye-Reuters

Riyadh-Mubasher: In its “Quarterly Oil Market Update” report, Jadwa Investment said global oil balances will likely increase in Q1 2015 as oil demand remains subdued but oil supply continues to expand from the US, Russia and Iraq. All of this will maintain pressure on oil prices in the first quarter.
“Beyond Q1 2015 we see prices recovering, with a sharper rebound in H2 2015, due to i) stockpiling of crude, especially in India and China ii) the occurrence of contango resulting in some surplus leaving the market iii) quicker than projected reduction in US shale oil and iv) a pickup in oil demand due to improvements in global economic growth, partially supported by the windfall gained from lower oil prices,” said Jadwa.
It added that Saudi Arabia’s strategy is clearly to maintain market share in key export markets and as a result it sees production falling only slightly in the next two years.
“We project full year average production in 2015 at 9.6 mbpd, declining to 9.4 mbpd in 2016,” said the report issuer.
Photo Credit: Arabianeye-Reuters