Expert: Oil prices to further decline

Oil&Gas Materials 9 September 2019 19:00 (UTC +04:00)

Baku, Azerbaijan, Sept. 9

By Sara Israfilbayova – Trend:

The oil prices will continue to decline by late 2019 and during 2020, Vasily Tanurkov, director of the corporate rating group of the Analytical Credit Rating Agency (ACRA), told Trend.

"We expect an average annual Brent crude oil price at $55 per barrel in 2020," the expert said.

“A short-term increase may be observed in quotations up to $70-75 per barrel amid the news about the slowdown in the oil production in the US and in case of any positive news about trade negotiations between the US and China,” Tanurkov added.

The expert thinks that several factors will impact oil quotes in late 2019 and during 2020.

"The shale oil production will be accelerated in the US as a result of the commissioning of new pipelines with a total throughput of 2.67 million barrels per day in 2019 and two million barrels per day in 2020," Tanurkov stressed.

He added that the commissioning of new pipelines will greatly reduce the “spread” between WTI and Brent grades and will accelerate the oil production growth in the US, which has been stagnating for nearly half a year amid a great decrease in drilling activity.

“Another factor affecting oil prices is the supply of additional volumes of oil to the market in 2020 through new offshore fields in Brazil, Norway and Guyana,” Tanurkov said.

"A slowdown in the pace of the global economy will be another negative feature,” he said. “Moreover, in case of a global recession, a drop in oil quotes may turn out to be more considerable."


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