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Oil prices jumped on Monday after Saudi Arabia announced a possible reversal of the decline in production despite political risks related to supply, but this support is expected to be short-lived due to changes in oil prices. in the energy sector, said Monday an expert.
"It's fine to talk about supply-side risks, but it's a bit short-term … I do not think expectations about oil prices have gone up," he said. said Scott Darling, head of oil and gas research for Asia Pacific at JP Morgan. .
This is due to the ramping up of American shale energy and slowing demand due to global economic uncertainties, Darling told CNBC's "Squawk Box" channel. J.P. Morgan expects OPEC to extend its oil production cuts until 2020.
Oil prices jumped on Monday after Saudi Energy Minister Khalid al-Falih said there was a consensus among oil producers of OPEC and Allied countries to continue to limit the offer.
Falih said the main option discussed at a meeting of the ministerial committee during the day was a postponement of production limits agreed by OPEC and non-members in the second half of 2019. Nevertheless, "things can change by June".
The OPEC, Russia and other non-member producers, an alliance known as OPEC +, have agreed to reduce production by 1.2 million barrels per day from the 1st January for a period of six months, an agreement to prevent the build-up of stocks and lower prices.
Brent crude futures were at $ 73.23 per barrel at 12:06. HK / INS, up $ 1.02, or 1.4%, from their last close. Brent closed down 0.6% Friday.
JP Morgan's forecast for Brent crude is $ 75 per barrel by the end of the second quarter of 2019. For the full year, Brent crude will average $ 71 per barrel in 2019 and fall to $ 60 a barrel from 2021, said Darling.
Darling's comments come as the market expects a further decline in Iranian oil exports in May and a further decline in shipments to Venezuela in the coming weeks due to sanctions imposed by the United States.
In addition, tensions between Saudi Arabia and Iran are exacerbated after last week's apparent attacks on two Saudi oil companies off the United Arab Emirates and another against Saudi oil facilities in the United States. inside the kingdom.
Riyadh accused Tehran of ordering drone strikes on oil pumping stations, for which the Yemeni Houthi group aligned with Iran has claimed responsibility. The UAE has not accused anyone of sabotaging tankers. Iran has moved away from both sets of attacks.
The attacks come as the United States and Iran vie for tougher Washington sanctions to reduce Iran's oil exports to zero, and a heightened US military presence in the Gulf in the face of perceived threats from the United States. Iran against their interests.
Nevertheless, current price support is likely to be short-lived due to the ramping up of American shale energy, which has shortened the oil market cycle, according to expert J.P. Morgan.
"It's hard to prove that oil prices are recovering significantly from here," Darling said.
-Reuters contributed to this report.
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