Oil prices to recover in 2019 and average at $60: survey

Brent crude oil, which collapsed 40 percent in the fourth quarter of 2018 to almost hit a floor of $50 a barrel, will recover this year and average above $60 a barrel. This is according to the findings of a survey by the Dubai-based research firm Gulf Intelligence.

The coalition of 25 OPEC and non-OPEC states (that came together for the first time in late 2016 to slash global oil supplies in order to reverse a 3-year oil price slide) agreed last month to once again cut their collective output by 1.2 million barrels a day in 2019.

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This should be sufficient to keep oil prices above $60 a barrel this year, according to 74 percent of those polled in the survey.

The OPEC+ agreement will extend through the first half of 2019 until the oil exporters group meets again in June.

While six months may be enough to reduce the combined output of OPEC and its partners by the agreed 1.2 million barrels per day (mbd), if the US production continues to grow at the current rate, it would likely offset this cut completely, the survey added.

US production of shale oil, which has added 5 million barrels of oil to US output over the last decade to move America onto a similar level as Saudi Arabia and Russia at around 11 mbd, has put a consistent downward pressure on oil prices in recent years.