Dubai: Oil prices are likely to remain volatile in the run up to April 17 meeting between the Opec and non-Opec producers.
“We think for time being oil prices would remain volatile, subject to the release of data,” Vaqar Zuberi, Portfolio Manager & Senior Analyst within Mirabaud Asset Management’s Hedge Fund team told Gulf News from Geneva.
On Friday, Brent crude ended a tad lower at $40.44 (Dh148.41) per barrel weighed by expansion of stockpiles in the US. Oil tumbled to a 12-year low last month before rebounding on speculation the global surplus will ease as US production declines and major producers including Saudi Arabia and Russia proposed an output freeze. Opec and non-Opec producers will be meeting mid next month to decide on the future course of action amid plunging oil prices.
“We believe in the interest of all parties to stabilise the prices of oil and we believe that comments alone won’t have a meaningful impact on prices till we see a clear trend of supply coming down,” Zuberi said.
Constructive
However, Mirabaud is constructive on oil prices in the second half of the year on steady demand, and lesser supplies.
“We believe that the supply demand gap will reverse in the second half of 2016 and early 2017,” Zuberi said, adding “the demand from US is well bid, amid demand from the emerging markets. There is supply destruction going on as large number of producers have become unprofitable.”
The supply demand gap currently stands at 1 million barrels per day.
