Global oil price likely to average USD 60-65 in 2019
Saudi Gazette reported that oil price is likely to average USD 60-USD 65 per barrel in 2019, and is unlikely to exceed USD 80 per barrel, Indosuez Wealth Management, the global wealth management arm of Crédit Agricole group, said last Dec. 13 at its 2018 Middle East Conference held in Dubai under the theme “Regional Transformation and its Challenges for Wealth Management and Millennials.” Dr Marie Owens Thomsen, Global Head of Investment Intelligence, Indosuez Wealth Management, said that “the average WTI price in 2018 to date is $66/barrel. In 2019 we expect an average price between$ 60-65/barrel, barring geopolitical surprises that can of course cause overshooting in either direction.”
Leading the first session of the conference dedicated to the state and outlook of the global economy, Thomsen, commenting on current oil-prices, further said “high oil prices have a dampening effect on growth globally and this notably for oil importing countries. Our forecast was that the WTI oil price was unlikely, and remains unlikely, to exceed USD 80 per barrel this year and next. Indeed, the high year-to-date was the USD 76.4 per barrel reached on October 3. The price on December 7 is USD 51.2 per barrel. That move is generally speaking positive for the global business cycle.”
The International Energy Agency (IEA) left unchanged its projection for oil demand growth in 2019 at 1.4 million barrels per day (mbd). It noted however that growth in global demand has accelerated, from modest growth of 0.5 mbd year-on-year in the second quarter of this year, to 1.3 mbd in the third quarter.
The IEA sees it rising to 1.6 mbd in the final three months of this year. While various measures of China’s economy have pointed to slowing growth, the IEA said the country’s thirst for oil remains unsated.
IEA said that “China’s apparent oil demand increased strongly” in the third quarter, when it grew by 840,000 barrels per day. This trend has continued in October when growth is estimated to have been” 700,000 barrels per day. The IEA last month lowered its forecast for growth of global oil demand for 2018 and 2019, citing high prices, trade tensions and a less favorable economic outlook. But oil prices, which struck USD 86 per barrel in October, then tumbled to USD 58 last month, prompting the opec oil cartel and Russia to agree on new production cuts to stabilize prices.
The IEA said that lower oil prices tend to support demand for oil and economic activity. The drop in oil prices “should help support demand in 2019.”
The Paris-based agency, which advises major oil-consuming nations, said that “The price impact is offset, however, by slightly lower economic growth assumptions and downward revisions to our projections for certain countries impacted by weak currencies, such as Turkey, or countries facing collapse, such as Venezuela.”
Source : Saudi Gazette