Bank of America Merrill Lynch (BAML) analysts believe that oil prices are likely to extend their bullish momentum into the next year while expecting the commodity to hit $ 100/ barrel on geopolitical developments.
Key Highlights via CNBC:
Oil prices look set to temporarily hit $90 a barrel during the first half of next year, if not sooner, and risk spiking to as much as $100 a barrel, depending on geopolitical events and other factors, say Bank of America Merrill Lynch analysts.
But they do not see an immediate major jump in prices. For this year, they forecast an average price of $70 a barrel for Brent crude, the international benchmark. They forecast $75 for next year. Their previous forecast was $60.
The analysts have a target of $90 a barrel during the second quarter of 2019, with a risk it could go to $100 a barrel.
"Looking into the next 18 months, we expect global oil supply and demand balances to tighten driven by the ongoing collapse in Venezuelan output. In addition, there are downside risks to Iranian crude oil exports. Plus we see a high likelihood of OPEC working with Russia in 2019 to set a floor on oil prices."
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