According to BNP Paribas, UBS and Commerzbank, a rise in oil prices will not last long. Prices may return to around $30 a barrel amid OPEC’s oil output near record high, the experts said.
In the analysts’ opinion, the increase in oil prices after January lows by 70% resembles the situation on the market in 2015 when recovery suddenly turned into a sharp fall in May amid the supply glut.
BNP and UBS warned that prices may plummet to $30 a barrel in the coming weeks.
“There are dangerous parallels to 2015,” said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. “The market already appears overheated and a correction is overdue.”
OPEC raised crude production by 484,000 barrels a day to 33.2 million in April, the most in monthly data since 1989.
The analysts’ scenario is quite likely, especially in the light of the recent failure of the Doha negotiations, where Russia, Saudi Arabia and other 15 nations were not able to agree about oil production caps as Saudi demands came as a surprise for all participants making it impossible to reach consensus.
