Moody’s: Oil prices will remain at $40-$60 per barrel in 2018, despite OPEC cuts extension

Moody’s, the US-based ratings agency, is out with its latest oil outlook report, titled ‘2018 credit trends report for the global oil and gas industry’, noting the following.

Oil prices will remain at $40-$60 per barrel in 2018 despite the extension of OPEC-led production cuts through the end of the year.

Higher prices within or above that range will see supply grow as countries lessen their compliance with production quotas and US shale production continues to increase.

Meanwhile, abundant supplies of US natural gas will constrain prices, even while demand goes up.

Global demand for oil will continue to grow through 2040, with light vehicle oil demand growth peaking by 2030.

Global oil industry to focus on disciplined investment, M&A for growth in 2018.

Terry Marshall, a Moody's Senior Vice President, "Political unrest in the Middle East, alongside assumptions of OPEC extending its agreement to cut production, helped to bolster oil prices in late 2017. Yet even with these factors offering a boost, prices will likely remain range-bound, and possibly volatile, on a combination of increasing US shale production, reduced but still significant global supplies, and potential non-compliance with agreed production cuts -- especially if demand growth is more tepid."