Weaker market fundamentals will eventually be a drag on oil prices this year with average Brent prices holding at around $107 per barrel this year and some slippage to $103/b expected in 2014, Samba Financial Group has said in a report.
Saudi-led Opec supply management will ensure the average Brent price holding this year, though Samba says it will not be surprised to see prices weakening in the spring, similar to last year.
There are many reasons for the oil market to likely weaken this year, the report said. Mainly the expected gains in North American and Iraqi production, which should keep global supplies elevated at a time of modest demand growth. In addition, challenges remain in the global economy with budget spending cuts in the US, and political fragility in parts of Europe posing downside threats to demand.
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