Brent crude oil rockets to three year high at $80-barrel as Bank of America forecasts price will rise to $100-barrel in 2019

The price of benchmark Brent crude oil broke through the $80-barrel barrier yesterday to take it to its highest level for more than three years.

It peaked at $80.37-barrel before cooling later to close at $79.38 in London markets.

Geo-political tensions in the Middle East were credited as the cause by market observers, in tandem with the ongoing OPEC cartel production cuts.

And Bank of America Merryl Lynch last night forecast that the price of Brent Crude could top $100-barrel in 2019 – bringing it close to the $110-barrel prices last seen in June 2014.

Francisco Blanch, the bank’s head of commodities research, said: “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,”

The price of oil is now almost three times what it was back in January 2016 when Brent crude fell below $28, it’s lowest price since 2003.  The price of a barrel of Brent crude has now gained more than 16% since early April. 

Scotland, despite being a major oil producing country, will see little or no benefit given oil revenues go straight to the UK Treasury. 

Successive UK governments since the 1970s failed to invest the many billions from the North Sea, and oil majors and minnows alike are taking a cautious ‘wait and see’ approach on making any decisions to investment in new oil exploration in the ageing Scottish basin.

Since it discovered oil in the North Sea last century  at the same time as Scotland, Norway’s sovereign wealth oil fund has grown to a current value of more than $1-trillion.

  • Three Scottish energy companies won industry export awards yesterday from the British Board of Trade – Bowalds Energy and oil and gas contractor Enerquip in Aberdeen and Glasgow-based temporary power generator Aggreko.

 

18 May 2018

 

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed