Wood Mackenzie revises Brent price forecasts down
Baku, Azerbaijan, Jan.21
By Leman Zeynalova – Trend:
Wood Mackenzie has adjusted our annual average price forecast for Brent by just one dollar - from $66 per barrel for 2019 to $65 per barrel, Trend reports citing Ann-Louise Hittle, vice president, macro oils.
“Our forecast of $68 per barrel for 2020 remains unchanged,” she said.
Hittle recalled that since trading resumed in January, the oil market has rebounded as the impact of production cuts from producers such as Saudi Arabia started to be felt.
“However, the market remains focused on the demand outlook, and there are a number of risks to the global economy that could depress the modest growth we forecast in oil demand and dampen the oil price outlook,” she said.
Ed Rawle, Wood Mackenzie’s chief economist, said that the company expects a benign global economic slowdown, with global GDP growth decelerating from 3 percent in 2018 to 2.8 percent in 2019 and 2.6 percent in 2020.
“In our base case, we expect global oil demand to grow 1.1 million barrels per day in 2019 and 1.3 million barrels per day in 2020,” noted Rawle.
Wood Mackenzie believes that despite the weakening sentiment about the global economy, oil demand growth remains robust, for now.
“On the other hand, supply growth is also slowing. After an estimated increase of 2.5 million barrels per day in 2018, global supply is forecast to grow 1.4 million barrels per day in 2019 and 1.8 million barrels per day in 2020. This assumes OPEC continues to restrain production through end-2020. With non-OPEC supply expected to increase, the OPEC+ cuts are critical to prevent significant oversupply,” said the company.
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