Saudi and Russian energy ministers in St. Petersburg in July discussed extending their deal to cut output by 1.8 million barrels a day beyond March 2018 if necessary.
The level of actual OPEC compliance rates divided survey respondents.
“We see Brent prices sustained at or slightly above $50 per barrel over the next few months,” said Johannes Benigni, chairman and founder of JBC Energy. “However, this hinges on compliance not only in terms of reported production figures but also in terms of actual arrivals at consumer hubs … otherwise the credibility of the deal and outright oil prices will suffer.”
JTD Energy’s Driscoll said he expected “greater threats” to OPEC and non-OPEC supply cuts. “Any perception that there will be ‘leakage’ will take air out of the balloon.”
UBS, meanwhile, projected that OPEC will remain “steadfast” in its commitment to restrain oil output, but assigned a 20 to 30 percent probability of a breakdown in the OPEC deal, which could translate to a short-term price drop to between $30 and $35.
Notably, few survey respondents were willing to venture levels over $50 in the current quarter.
“The price range seems to be shifted downwards because of greater efficiencies, new supply and demand not being strong enough to pick up all that extra supply,” said Daniel Yergin, a Pulitzer Prize-winning energy historian and vice chairman of IHS Markit.