Baku, Azerbaijan, July 10
By Leman Zeynalova – Trend:
The European Commission has downgraded its oil price forecasts for 2019 by 7 percent, as compared to the spring predictions, Trend reports citing the Summer 2019 (Interim) forecast of the Commission.
“Oil prices have decreased to just over $60 per barrel in May 2019 amid growing uncertainties related to global growth and intensification of the US-China trade dispute. More recently, rising geopolitical tensions in the Middle East have pushed Brent oil prices again up above $65 per barrel,” said the report.
Nevertheless, the assumptions for Brent oil prices have been revised downwards, in line with futures markets, to an average of $ 64.7 per barrel in 2019 and $ 61.5 per barrel in 2020, down by 7 percent in 2019 and 9 percent in 2020 compared to the spring assumptions.
Overall, given also the lower technical assumptions about oil prices, the forecast for headline inflation in the euro area is revised down to 1.3 percent in both years, which is 0.1 pps. lower compared to the spring forecast, said the European Commission.
“Despite rising wages and relatively robust private consumption, inflation has remained subdued so far. As the strong base effects from energy price inflation gradually bottomed out, headline inflation moderated again in May and June from earlier this year. This diminishing impact from energy price inflation is expected to continue for most of 2019.”
---
Follow the author on Twitter: @Lyaman_Zeyn