Bank of America Merrill Lynch on the dynamics of oil prices. Expects WTI at 59$

Bank of America Merrill Lynch noting that the dynamics of oil in recent weeks looks like a normal correction after a good growth. The bank pay attention to the fact that the movement is also justified by seasonal factors, and consider it as a buying opportunity. In BoAML believe that oil is firmly entrenched at levels above $ 40 a barrel, and a recession in the world economy or a shock on the supply side, for example in Libya's production recovery (production recession risks such offset risks in Venezuela and Algeria) or substantial progress in building production in Iran (BoAML believes that Iran's production of the second half of 2017 to reach 3.9 million. b / d), can justify the return of the bear market in the next year. In this scenario, the average price of Brent crude in 2017 could reach $ 37 per barrel.

Meanwhile, the incoming data suggest that global oil supply is reduced, and minimize the investment plans of oil companies, coupled with increasing demand gives reason to say that everything is going to ensure that in the future we are facing a significant shortage of "black gold". BoAML estimated that world oil demand this year will show growth of 600,000 barrels per day, while production in the third quarter will be reduced by 300,000 barrels per day compared to 2015. The main scenario, according to the bank, is the growing demand for 1.2 mln. barrels per day next year. If Brexit will lead to further growth of the dollar and the weakening of global economic growth, the growth in demand of 0.7 million barrels a day is probably to ocur, and it will give a reason for the decline of Brent price to $ 52 a barrel -. Currently BoAML adheres to such a forecast for the fourth quarter of this year and expects an increase to $ 61 in 2017. The forecasts for the price of WTI crude oil is $ 51 and $ 59 respectively.