Wood Mackenzie sees a “loosening” of the oil market towards the end of the year, Sushant Gupta, a director at the research and consultancy business, revealed in an interview with CNBC on Tuesday.
“If you look at … Q4 and towards 2019 what we see is a … loosening of the oils market,” Gupta said in the televised interview.
“Mainly because if you look at the one million barrels per day of production increase coming in from Saudi Arabia, Kuwait, UAE and Russia; the US tight oil production growth we see another million barrels per day of growth coming in 2019; and at the same time the global oil demand growth is expected to see a slower demand growth next year of 1.2 million barrels per day compared to 1.5 [million barrels per day] this year,” he added.
“All these factors combined together indicate toward a loosening of oils market going forward towards Q4 and 2019,” Gupta continued.
Looking at the “very short term,” Gupta said Wood Mackenzie expects the market to remain “very tight”.
“The lower supply from Iran coincides with the lower supply from Libya and Venezuela, so hence the market in Q3 is expected to be very tight, and hence we expect prices to remain supported at close to $75 per barrel of oil,” he said in the interview.