Global oil prices will have limited upside in the run-up to the May OPEC meeting because of growing oil output in the United States and strength in the US dollar index. Prices will come under additional selling pressure if OPEC fails to extend a self-imposed production cap beyond June 2017.
While some OPEC members, including Kuwait, have shown themselves to be willing to extend the deal, other members, including Saudi Arabia, have not been so forthcoming. Consequently, the Brent crude front-month futures price has averaged $53.1/bbl so far in March, down from an average of $56/bbl in February. GGA expects the price to average around $54/bbl in 2017 as a whole compared with $45.1/bbl in 2016.
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