Kuwaiti crude barrel average price at USD 50 in 2015 -- expert

By Osama Jalal KUWAIT, March 4 (KUNA) -- Average price of Brent oil is forecast to reach USD 55 in 2015, equal to USD 50 for the Kuwaiti oil barrel, as year 2015 will suffer an oversupplied market but will be more balanced in 2016, said Kuwaiti oil expert Mohammad Al-Shatti on Wednesday.
He added in remarks to KUNA the average price of Kuwait crude reached USD 42.2 pb last January, compared to USD 51.9 pb last February, an increase of USD 10 pb, he said.
Oil prices are weakening during the second quarter of this year, however they will recover during the second half, as Brent oil prices are hiking towards USD 60 pb, thus reflecting positive market conditions, he said.
Decrease of the oil prices started to affect the United States production of crude oil, as US Energy Information Administration (EIA) lowered production estimations in 2015 from USD 9.42 million barrels to 9.3 million barrel daily, he added.
Cold weather has contributed to supporting heating oils' prices in the US, whereas a number of oil refineries shut down due to strikes, thus posing a challenge to the US crude oil prices.
Improving oil prices are connected to two factors; market supplies and US dollar rate vis a vis other major currencies.
Meanwhile, a number of positive indications are contributing to stability and recovery of oil prices during the near future, including the drop in crude prices, which compelled companies to decrease investments in exploration and drilling, thus helping in demand stimulation, Al-Shatti said.
There is also a number of technical and geopolitical factors, namely situation in Libya, Iran's nuclear negotiations, Iraq's ability of oil production, stability of Organization of Petroleum Exporting Countries' (OPEC) production, non-rising supply, Ukrainian crisis and its effects on Russian oil production, decreases in growth rate of shale oil, and signs of recovery in the Japanese and European economies as well as the strength of US economy.
Meanwhile, there is a number of other negative factors affecting oil prices, namely putting a large number of oil refineries under maintenance in various parts of the world during the coming months, which weakens demand on oil, and thus affects the oil prices, besides the Iraq's plans of increasing production abilities and continuous rise of US crude oil production to high levels, he said. (end) sj.tb.lb