Oil prices will consolidate some gains to average US$65 in 2018, after prices averaged US$54.8 in 2017, credit insurer Coface forecast recently.
According to the company, higher prices could bolster increased U.S. shale production, undermining the efforts of the OPEC and its allies.
In addition, demand growth could mark a slowdown, Coface predicted.
“In particular, in Asia—the world’s biggest oil consuming region where refiners have benefitted from increased margins in the past three years and have accumulated stock—could reduce their purchasing in light of higher prices and lead to reduced overall demand,” Coface said in a statement.
While compliance remains a lingering source of concern this year, crude prices have also been supported by geopolitical risks recently, the firm observed.