TD Securities on Monday said Brent crude oil prices likely to touch $90 per barrel in next few quarters.
In an interview to CNBC-TV18, Bart Melek, head of commodity strategies, said, "What we are seeing is a fundamental tightening in global supply demand conditions in the crude market. This is because the US imposing tariff, restrictive regime on Iran and that means countries like India, South Korea for example, will be searching for oil from other sources.
According to Melek, the problem is America's retaliation against companies, shippers and everyone else who is involved with Iranian oil, "We expect quite a significant decline from that country to the rest of the world and that means, we are going to need crude from somewhere else. At this point, it looks like Saudi Arabia. There is enough spare capacity for now, but it also means that spare capacity globally will come down very critical levels."
Melek said, "Our official view right now is a price of $78 for the first quarter for 2019. However, as we have already seen, this could very well be too low. We forecast average prices, which is a little different than looking at the possible highs, but this could go significantly higher given the right set of circumstances."
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