KUWAIT: The expected average price for Brent Crude oil in 2016 is $39 per barrel, equivalent to $34 per barrel of Kuwaiti crude oil, a Kuwaiti oil analyst predicted yesterday. This prediction is in line with plummeting crude oil prices during the first quarter of the year, with a gradual recovery expected during the second half of 2016, analyst Mohammad Al-Shatti said.

Moreover, the disparity in prices between Gulf oil and Brent crude could further widen as means of keeping the market afloat and maintaining a level of competition between oil producers, Shatti said. The decline in oil prices comes amid dismal conditions as the price of Brent Crude oil reached a record of $115 per barrel in June 2014 only to plunge to a staggering $30 per barrel in January 2016, Shatti noted.

The analyst also noted that the expected entry of Iranian oil into the market in February 2016 is sure to have an effect on supply and demand during the year. On average, the price of oil during 2015 stayed within the range of $35 to $66, a possible indication of average oil prices during the expected recovery in the second half of this year, Shatti said.

Rising hostility

Meanwhile, Shatti opined that rising hostility amongst some of the world's largest oil producers, nations with "massive oil reserves", no longer has a bearing on oil prices, a testament to what he said was "oil versatility. " As for price of Kuwaiti oil, he said that it now stands at $24 per barrel, a decline not seen in 12 years.

The number of oil drills in the United States has dwindled from 1609 in October 2014 to 516 on January 8, perhaps an omen that the decrease in oil prices shows no signs of abating, Shatti said. A daily decline of 330 thousand barrels is expected for 2016, he added.

On whether the prices of oil can ever regain its glorious form, Shatti said that expected prices for a barrel of Brent Crude oil for the years 2018 and 2019 are between $50 to $70, a sign that a sharp decline of oil prices would persist in the next few years. - KUNA