Oil at $60 Gains More Backers

Oil at $60 Gains More BackersOil at $60 Gains More Backers

The UAE's economy minister joined forecasters looking for $60 crude this year with demand and production moving more in line.

"It’s possible for oil prices to reach $60 or more during this summer" as demand increases in the United States, UAE Economy Minister Sultan bin Saeed Al Mansoori said at a conference in Abu Dhabi on Monday, Bloomberg reported.

"Crude will end the year higher than $60 a barrel," Mario Maratheftis, global chief economist at Standard Chartered Plc, said on Bloomberg TV.

SEB Bank forecast last week that Brent would touch $60 at times in 2016.

Oil futures jumped 31% this year, climbing above $50 a barrel last week, as US crude stockpiles declined, trimming a glut. Robust demand in India and other emerging nations led the International Energy Agency in May to reduce its estimate of the global oil surplus for the first half. Brent last traded above $60 in July.

“We’ve always been incredibly bullish on oil,” Maratheftis said. “We expected supply to collapse. Demand is still very strong. I would expect oil prices to keep rising.”

Brent for July settlement fell 0.3% to $49.15 a barrel, after trading at $50.51 last Thursday. But the next meeting of the Organization of Petroleum Exporting Countries in Vienna this week could put a dent to the bullish prospect.

In a survey conducted by Bloomberg, all but one of 27 analysts surveyed said the group will stick to its strategy of maintaining output to defend market share, a decision that could send prices downward in a market marked by cutthroat competition. But according to the International Energy Agency and Goldman Sachs Group Inc., OPEC's current strategy may have worked as global supply and demand are moving back into balance.

“We don’t think this meeting is going to come to too much,” said Wayne Gordon, executive director for commodities and foreign exchange at UBS Group AG. “The key here is whether the undrilled wells in the US, given the increase in price, start to be explored and start to produce.”