A few months ago, predictions were that the oil market for 2020 would be the one to look out for as “many market commentators predicted that if $100/bbl-oil was going to make a comeback, it would happen in 2020,” according to Bloomberg. But the release of the first official assessment of 2020 by the International Energy Agency on Friday shows persistent surpluses could be accumulated next year. This does not indicate rising prices, which were previously predicted and the reason why investors kept a keen eye on the oil market.
"The balances for 2020 were already worrisome, and the downgrade in demand we are contemplating put them potentially in the ugly category," said Roger Diwan, an OPEC watcher at consultant IHS Markit Ltd.
The main reasons for this switch in the forecast are: a slowing global economy, rising shale production and the prospect of a trade war.
As the oil market stands, it is already showing signs of supply potentially overweighing demand. If this forecast becomes a reality, OPEC and Saudi Arabian and Russian alliances may be forced to continue its output cut in order to avoid stored excess supply on a global scale.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses.
© 2000-2020. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at email@example.com.