Demand for crude has been healthy this year and is expected to be good over the next year too, but supply-side challenges might continue, says Virendra Chauhan, Oil Analyst at Energy Aspects. Lot of Russian oil projects will come online in the second half and therefore, chances of any output cuts are bleak, he says. Weather-related supply issues in US and ad valorem taxes leading to refineries not wanting to hold inventory on their books runnning into the year end for tax purposes have led to volatility in crude prices of late, he says. Considering supply-side challenges, he expects crude prices to remain in the USD 40-50 per barrel range in the near term. Going into 2017, though, there might be some gains with prices likely ranging between USD 45-55 per barrel, he adds.
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