Abu Dhabi: Oil price could go up to $80 (Dh294) per barrel in the next six months but it may not sustain at that level, experts said as major investment banks predicted this week that oil could rise further due to healthy demand, drawdown in the global oil inventories and high Opec compliance.

Goldman Sachs sees global benchmark Brent crude oil trading at $82.50 per barrel within the next six months. JP Morgan also predicted a higher oil price in the coming months.

But Jaafar Altaie, managing director of Manaar Energy Consulting said there are still persistent downward threats to the price from the rise in the US shale oil production and weak compliance among Opec members.

“I see Opec compliance sustaining a couple of months as long as the prices are sustained at the current levels. If the prices rise, I don’t see compliance is going to continue in the same way. Iraq is determined to expand its production, Iran has already expanded its production and Saudi Arabia is increasing its drilling rigs to build more capacity,” he said.

“It is possible that the price of oil could go up to $80 per barrel in the next few months, but I am sceptical whether it can be sustained at those levels. For that to happen, global oil inventories have to come down and Opec compliance should be strong.”

He predicted Brent to trend at current levels for the remainder of the quarter and could go up by five dollars if the Opec compliance remains strong.

Agreement extension

Opec and non-Opec members led by Russia are cutting production by about 1.8 million barrels a day to help lower global oil inventories and prop up oil prices.

The agreement, which initially called for a six-month period, was later extended until the end of 2018, with participating countries recording a good level of conformity.

In December 2017, Opec and non-Opec producing countries achieved an conformity level of 129 per cent, the highest since the start of the Declaration of Cooperation in 2016, according to a statement by Opec last month.

According to a note by Ole Hansen, head of commodity strategy at Saxo Bank, crude oil remains close to key resistance following a week where record US production and the first inventory rise since November was more than offset by updates showing a continued strong compliance among Opec members currently keeping production capped.

“Robust upgrades to oil price forecasts from major commodity houses such as Goldman Sachs and JP Morgan added to the bullish sentiment,” he said.