S&P raises 2018 Brent oil price assumption to $55 a barrel

While S&P Global noted the persistence of a wider differential of $6 per barrel between Brent and West Texas Intermediate (WTI) crude oil prices recently, the firm stated the gap between the two was likely to be "nominally smaller" in 2018.

The ratings agency expected both Brent and WTI to be range-bound in 2018, noting that while Brent had been trading above $60 per barrel since October 2017, first reaching that level on 25 September for the first time since July 2015, it believed that the price increase was a reflection of ongoing OPEC production cuts, supply disruptions, and temporary production declines.

Shipments from northern Iraq declined throughout October as a result of Kurdistan's independence referendum, as well as from other regions, but S&P anticipated those specific supply issues would be addressed in the coming months.

In conclusion, the S&P analysts said, "What's more, we believe that continuing production growth may marginally exceed consumption growth in 2018."

S&P left its 2018 price assumption for WTI unchanged at $50 a barrel.