Oil seen by Crescent Petroleum hitting $60 this year on demand

Crescent Petroleum Co., an oil and natural gas producer in Egypt and Iraq, expects crude prices to improve this year as supply becomes more in line with demand.
The UK’s decision to leave the European Union won’t have a lasting effect on crude prices and London will remain a center for international oil and gas companies, CEO Majid Jafar said in an interview in Dubai. 
Oil fell 4.9 percent in New York and London Friday after the UK voted to exit from the 28-member bloc. Benchmark Brent crude settled at $48.41 a barrel.
“We’ll start to see oil prices creeping back up,” Jafar said. “I wouldn’t be surprised if we even hit $60 this year.”
Crude has gained about 30 percent this year on supply disruptions from Nigeria to Canada and falling production in the US Members of the Organization of Petroleum Exporting Countries have produced crude without limits since 2014 in an effort to maintain market share and force higher-cost suppliers such as US shale to reign in production.
“If we look at the supply-demand balance, it’s actually tightening,” Jafar said. “That will continue as the year goes forward.”
The Sharjah-based company sees opportunity for growth in Egypt and Iraq, Jafar said. 
Crescent operates in those countries through Dana Gas PJSC, in which it has a 19 percent stake.
The Brexit vote drove a new level of uncertainty into the markets Friday.
Despite the losses — which came after traders bid up oil in expectation of a “Remain” vote — crude prices were still close to high levels for the year, helped by more signs of tightening.
“Recessions cause low oil prices and the UK break with the EU raises concern of a recession in Europe,” said James Williams of WTRG Economics.
In addition, he said, the process of arranging the separation will be lengthy and difficult.
“Every major headline on the negotiations for the next two years has the potential to move the oil market,” he said.
Tim Evans of Citi Futures cautioned that Friday’s oil market moves are just an initial reaction and not the full price adjustment to Britain’s decision.
“We think confidence has been shaken and that the lack of physical tightness exposed by the initial decline will be highlighted, leading to a further wave of selling,” Evans said.

Source : Arab News