(MENAFN- Arab Times) KUWAIT CITY March 4 (KUNA): Average price of Brent oil is forecast to reach $55 in 2015 equal to $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 $42.2 pb last January compared to $51.9 pb last February an increase of $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 $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 $9.42 million barrels to 9.3 million barrel daily he added. Challenge 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.
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