Fat Prophets: By the end of the year 2019, the price of Brent will be between $ 74 and $ 84: David Lennox, Fat Prophets

OPEC will increase production but will not significantly exceed the one million barrels that it suggested, David Lennox Resource Analyst, Fat Prophets says ET Now .

Published Extracts:

Not for the first time, we saw Donald Trump revisit a decision made by himself. We could call it capricious, but at that point, we see it taking a toll on Brent prices. Nymex has also declined. Do you believe that Donald Trump could partially relieve the Iranian sanctions? Given that Europe supports Iran, is there a possibility that the United States can completely go back and renounce these sanctions?


Markets suspect that the United States may be a little more tolerant than rhetoric. If you go back to the first sanctions that were imposed on Iran some time ago with regard to their nuclear aspirations, we have seen Iranian oil coming out the back door and this has helped to keep oil prices down. .

Remember that Donald Trump has repeatedly suggested that the price of oil is too high for his taste. Strict adherence to Iranian sanctions would have led to higher oil prices. Trump seems to have figured it out and maybe will let himself go a little on this backdoor oil.

We are currently receiving very contradictory signals because, on the one hand, we have resorted to the EU for the exemption of sanctions and, on the other hand, we had many indications that Iranian oil could get sanctions. In this context, do you think that crude prices could slide further?

You are certainly here and we think the real clue is not so much that we will see Iranian oil coming to the market and there is no doubt that even with the penalties, it's really this what does the OPEC group do. A few weeks ago, the group hinted that it was going to increase its production by about a million barrels to bring down somewhat the higher oil prices we experienced at the time . They have certainly not done that so far. They did not increase production by the quantum that they suggested. This may be part of what OPEC has seen as adjustments, as Iran is able to deliver to the markets.

We are watching very closely and at this point it should be suggested that the markets are very confused about the signals that traders receive regarding the supply or, in some cases, the demand for oil.

Let Iran out of the situation and understand if the other members of OPEC and OPEC like Saudi Arabia, like Russia, have actually increased their production, especially after the last meeting of OPEC?


If you look at the June figures that came out of OPEC, this suggests that there has been an increase in production of about 1.73 million barrels in the US. whole group. The Saudis have increased production by about half a million barrels, but certainly 1.73 million barrels a day at least would not be enough to bring down the price of oil. On the contrary, we expected some recovery in the price of oil given the June move.

So, if Iran is able to remain fully producing and fully exporting, then this will not bring back a significant number of barrels to the market and certainly less than the one million that OPEC is seeking to increase. This should support the fact that oil prices do not make them fall.

Tell us what you think about Brent: this year we saw Brent go from $ 70 to $ 80, and now it looks like we're back near $ 70, if not lower. At around $ 71, where do you think Brent will be available for the rest of the year?


Since volatility has not changed, prices at the end of the calendar are between $ 74 and $ 84 for the price of Brent. We believe that OPEC will support production, but it would not significantly exceed the proposed one million barrels. This will be very favorable to oil prices in the future and this shows that there is more tightening of supply than what markets may think. This price range gives us just a little bit of potential for the rest of the year.