How Will Oil Price Behave In 2020?
Andre Vieira | Jan 17, 2020 10:57AM ET
It is a difficult question to answer.
However we can see that the U.S. production keeps rising (despite of some disappointing economic returns on shale) even with a significant drop on the oil rig count.
Source: Federal Reserve of Dallas
The EIA also predicts that the oil prices will be above the 2019 average (almost at the same level) as the demand tends to grow a bit higher than the production.
Source: U.S. Energy Information Administration
The global economy currently works on a less uncertainty environment especially after the commercial agreement (phase 1) between USA and China, which is crucial for the oil consumption growth.
Even so we may be very close to the end of the current and larger economic cycle expansion we have ever seen (there are some concerning signals which point to that such as the current corporate debt level and flat corporate earnings, central banks negative interest rates, massive capital injection through QE etc.) which may affect the world economy and therefore the oil demand in a near future.
Moreover, we will have the president election in USA and we still may see geopolitical tensions increasing during this year which may bring an important volatility on oil prices.
So, what is your bet?
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.