Credit Suisse raises Brent/WTI forecasts for 2018 and 2019

Credit Suisse has raised its 2018 oil price forecasts, predicting that those higher prices would hold during the following year even as OPEC barrels returned to the market.

According the investment bank's global oil macro team's latest predictions, Brent and West Texas Intermediate were now seen finishing the year at $71 and $66, respectively, which was up from their prior view for prices to reach $60 and $56 barrel.

Global inventory draws would resume in the second quarter of 2018, resulting in a drop in OECD commercial oil stockpiles back to "normal" levels, in-line with their five and seven-year averages, it said.

"We forecast Brent/WTI prices will remain strong in 2019, though roughly level with 4Q18 as we assume bullish sentiment moderates with OPEC barrels returning to the market," the investment bank predicted.

Its previous 2019 forecasts for Brent and WTI had been $60.75 and $58.0.

At the company level, all of the above would suffice to stoke investment in increasing supplies from outside of OPEC and in North America, Credit Suisse added in a research report published on Monday but dated 13 April.

Year-to-date, investment awards in the sector were tracking at $13bn, it estimated, for growth of 50% year-on-year.

"We expect that positive momentum to continue, with Technip FMC, Subsea 7 and Saipem amongst those set to benefit from the order inflection," Credit Suisse said.

To back up their arguments, its analysts pointed out how over the prior week Saudi Aramco had inked between eight and $10bn-worth of memorandum's of understandings with Technip FMC and Honeywell to analyse production technology for use at a chemical plant at its Port Arthur refinery.