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The forecast exceeds last year's, but the figures are not encouraging. It may be another rough year for oil prices
Last year, oil price suffered its worst annual loss since 2015, when Brent fell by around 20%, reaching USD 50 per barrel. Meanwhile, US crude suffered a fall of approximately 25% due to the volatility of the stock market, geopolitics and the weakening of predictions of demand in the energy market. Even so, the predictions of the price for 2019 are not encouraging; however, 2018 are planned to be exceeded.
Leer en español: ¿Cuáles serán los precios del petróleo para el 2019?
According to The Balance website and the outlook of the United States Energy Information Administration, world oil prices will circulate at USD 61 per barrel in 2019. This figure is USD 11 per barrel lower to the one predicted by the same organization last month.
A stormy year continues
The change in this forecast was due to the fall in oil prices that occurred in November, reaching at one point figures below USD 50 per barrel. This drop was due to the fact that raw material traders lowered their prices predicting an oversupply of crude oil by the United States. This country would have flooded the market, while the slowdown in growth would have reduced demand.
Likewise, this crisis contributed to the fact that Saudi Arabia and Russia produced record levels of oil, foreseeing a possible shortage in the supply of oil due to US sanctions against Iran and production interruptions in Venezuela caused by economic and political crises.
The fall in prices came just two months after the world prices reached September 24, 2018, a price of 81.20 USD, and a maximum that had not been reached in the last 4 years.
Thus, on December 7, 2018, the Organization of Petroleum Exporting Countries (OPEC) agreed to reduce 1.2 million barrels per day from October; the members of the organization committed to a reduction of 800,000 barrels per day and their allies to a reduction of 400,000 barrels per day. It is also expected that these cuts will be made for six months, with the purpose of returning the prices to USD 70 per barrel for the fall of 2019.
According to the financial company JP Morgan, if OPEC does not fulfill its commitment to reduce oil production throughout the year, it will be very difficult to achieve a rise in oil prices. The company warns that among the factors that could contribute to keeping oil prices low in 2019 are the slow demand for crude oil and the uncertainty about full compliance by OPEC members, including the largest producer: Saudi Arabia. Likewise, the company announced a forecast of USD73 per barrel for November 2019, under the assumption that the reduction agreed by the OPEC countries will be fulfilled.
LatinAmerican Post | Sofía Carreño
Translated from: '¿Cuáles serán los precios del petróleo para el 2019?'