May 24, 2018 - 10:14 AM EDT
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Akita Matsui Trading Says Brent Oil Future Price Reaches Two Year Highs

TOKYO, May 24, 2018 /PRNewswire/ - Akita Matsui Trading research department have noted that the five-year forward price for oil futures is on the rise after a period of stability. ‎At the same time, the price of spot oil has moved above the 5-year forward price.‎

‏The Brent forward price averaged $63 a barrel last week, outpacing the gains ‎in spot prices, thanks to supply concerns and an OPEC-led deal to limit production, ‎according to fresh industry projections.‎

Max Harrington, Head of Corporate Equities at Akita Matsui Trading wrote in a note to investors: "The balance between strong production growth outside OPEC, on the one ‎hand, and continued restraint by major producers, on the other, remains the key ‎factor on the supply side.‎"

"With the spot price having now moved above the five-year forward price, ‎one could conclude that a trend change is under way," he added.

Better prospects for economic growth in Asia would fuel strong demand for ‎oil until at least 2023, the survey showed. Key economists at Akita Matsui Trading are forecasting that global oil ‎demand will increase by 7 million bpd during the same period to nearly 105 million ‎bpd. ‎

Edward Cohn, Director of Investor Services at Akita Matsui Trading, said, "Even if ‎producers' compliance remains elevated over the upcoming years, the ‎explosive growth in U.S. shale oil output accompanied by growth in its export capacity ‎are able to hurt the balance towards weaker prices in the month ahead."‎

However, doubts over the future of compliance with the output cut deal and ‎rising U.S. production could stem the upward momentum. This would take the world's biggest consumer past top exporter Saudi Arabia and ‎within reach of biggest producer Russia. ‎

Elsewhere, investors are now expecting that oil prices will be pushed up ‎by fears of the extended stand-off between the United States and several key ‎producers such as Iran and Venezuela, which would definitely hurt its oil exports.‎

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SOURCE Akita Matsui Trading

Source: PR Newswire (May 24, 2018 - 10:14 AM EDT)

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