Thursday , May 6 2021

Oil is set for the first annual drop in three years



Despite the slight recovery of oil prices on the last day of 2018, benchmarks have been set for their first overall annual decline since 2015, reports Reuters, pointing out that from the beginning of trading in Asia today, Brent and West Texas Intermediate grew by about 1 percent each.

There seems to be too much uncertainty about oil due to stronger recovery after prices began to fall early in October, after rising earlier this year to more than $ 80 a barrel for Brent, though short. Concerns over global economic growth and the following moves in the trade war between the US and China are among the main factors. The last OPEC decision to start cutting production since January is also considering, although price developments over the last few months indicate that the market is disappointed with the level of decline.

President Trump pointed out that the deal with China may be ongoing, but the uncertainty will probably last until such an agreement is announced. The trade agreement between the world's largest oil producer and one of the biggest consumers would certainly be a bull for oil as well as improved prospects for the global economy – also linked to the agreement between the United States and China.

In fact, despite this year's total loss, analysts of investment banks will soon begin rising crude oil crude reference values. Bloomberg's research among analysts suggests that the feeling will change in the new year, with Brent's oil consensus of US $ 70 per barrel.

According to research participants, oil demand will remain strong in 2019, the OPEC cut will work to support prices, and production losses in Venezuela and Iran will strengthen the bikewise effect.

"We could even see something like the V-Year recovery in the year two, very important conditions," said Michael Cohen, Barclays, adding that the conditions were: "One, reducing OPEC exports leads to a reduction in inventories. secondly, we do not see further deterioration of macroeconomic conditions. "

Written by Irina Slav for Oilprice.com

More Top Reads from Oilprice.com:


Source link