Oil prices will stage a modest recovery in the fourth quarter to average around $50 a barrel, but additional gains will hinge on OPEC not only ratifying a deal in late November to cut supply but sticking to those limits, a CNBC survey showed.
Brent crude, the benchmark for two-thirds of the world's traded oil, will likely average $49.60 a barrel for the fourth quarter, up from almost $47 a barrel in the prior quarter, the survey of 31 commodity strategists, analysts and economists showed.
OPEC agreed on September 28 to cut output to a range of 32.50 million barrels a day and 33.0 million from 33.2 million barrels a day, its first output cut since the 2008 financial crisis.
Though last month's agreement was only provisional, it was enough to boost prices by about 10 percent. Benchmark crude hit a one-year high on October 10 suggesting OPEC succeeded in putting a short-term floor in the market, said Johannes Benigni of JBC Energy. Downside pressure "is limited by OPEC's renewed intention to manage the market price" despite 'massive' volumes of oil in storage, he said.