arabic Economy French Highlights Oil and Gas

Oil price to average $60-65 in ’19, unlikely to exceed $80: Expert

Oil price

Oil price is likely to average $60-$65/barrel in 2019, and is unlikely to exceed $80/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 “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 $80/barrel this year and next. Indeed, the high year-to-date was the $76.4/barrel reached on October 3. The price on December 7 is $51.2/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 on Thursday 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.

“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, it added.

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 $86 per barrel in October, then tumbled to $58 last month, prompting the opec oil cartel and Russia to agree on new production cuts to stabilize prices.

Lower oil prices tend to support demand for oil and economic activity.

The drop in oil prices “should help support demand in 2019”, said the IEA.

“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,” said the Paris-based agency, which advises major oil-consuming nations.

Thomsen’s colleague Davis Hall, Global Head of Forex and Precious Metals, addresed gold’s relative underperformance over the past year due to a strengthening dollar and to the crisis in Turkey.

He said: “Turkey, which is a significant source of global gold demand, has been selling the yellow metal in response to the weakening lira. This has played a role in dragging down gold prices this past year, along with the stronger dollar which makes the yellow metal more expensive for investors in countries with weaker currencies. Gold remains an inflation hedge for investors holding global equities and our current forecast is that it will reach $1,315/Oz next year.”


Source: saudigazette

Related posts

تركيا وكورونا.. هل هناك “إيطاليا جديدة”؟

La rédaction

معلومات خاطئة: إن شرب الماء أو المشروبات الساخنة كل 15 دقيقة كفيل بالقضاء على #فيروس_كورونا❗️

La rédaction

“الحرب العالمية” ضد كورونا.. 5 اكتشافات علمية هذا الأسبوع

La rédaction

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More