The price of Brent Crude could hit $100 next year according to Bank of America Meryl Lynch [BAML].
The prediction follows a sustained surge in the price of oil which hit $80 on Thursday, its highest price since 2015.
Francisco Blanch, head of commodities research at BAML, 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. In 2015/16 the fall in the price of oil received widespread coverage on BBC Scotland.
Coverage on BBC Scotland included attacks on the economic prospects of an independent Scotland.
The sustained rise in the price of oil has been helped by the US decision to end its participation in the Iran Nuclear deal. Sanctions imposed on Iran have also led to fears that France’s Total will pull out of the Iranian South Pars 11 gas field project.
The recovery to $80 is good news for oil producing countries but bad news for net importers. Scotland, despite being an oil producing country, will likely see little or no benefit given oil revenue goes straight to the UK Treasury. Successive UK governments since the 1970s failed to invest the many billions from the north sea.
Norway, whose government invested profits from its oil resource, has witnessed its Oil Fund grow to over one trillion dollars. In 2017 the fund returned over $130 billion – more than four times the value of the block grant Scotland receives from Westminster.
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