Jan 20 (Reuters) – Bank of America Global Research raised its 2020 oil price forecasts on Monday, citing risks to supply from the Middle East, an improving demand outlook and higher OPEC+ compliance to deepen output cuts.
The bank upgraded its average 2020 Brent price outlook to $62 per barrel from $60, and West Texas Intermediate (WTI) price forecasts to $57 from $54, BofA analysts said in a note.
The bank expects global demand to grow by 1.1 million barrels per day during this year, while its supply and demand outlook suggested a surplus of 190,000 barrels per day.
“An improving demand outlook and high levels of OPEC+ compliance, coupled with increased risk of supply disruptions, have curbed our projected global oil market surplus in the first half of the year,” the bank said.
“Thus, we now see a more benign oil market environment compared to our prior projections.”
The bank, however, kept its end-second quarter 2020 Brent price target unchanged at $70 per barrel on an improving macroeconomic picture and restocking by manufacturers.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed last December to deepen output cuts for the first quarter of 2020.
Oil prices rose to their highest in more than a week on Monday after two large crude production bases in Libya began shutting down amid a military blockade.
Earlier this month, benchmark Brent futures rosen to an over three-month high after an air strike in Iraq authorized by the United States killed a top Iranian military commander. (Reporting by K. Sathya Narayanan in Bengaluru; editing by David Evans)