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US Ministry of Energy predicts reduction of oil prices

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US Ministry of Energy predicts reduction of oil prices
October 09
09:00 2019

The US Ministry of Energy has published a monthly report, which turned out to be discouraging. It is expected that in the last quarter of this year the price for Brent crude oil will not exceed $ 59 per barrel. Analysts suggest that prices will have fallen to $ 57 by the second quarter of the next year. This is $ 5 lower than the price published in the previous report.

An increase in world reserves of black gold in the first half of next year is the reason for such a significant fall.

Also, the U.S. Energy Information Administration (EIA) has given the forecast for the average price per one barrel of oil. In 2020, it will be equal to 60 US dollars.

Attacks on the infrastructure of Saudi Arabia have had a significant impact on world oil prices. The attacks have revealed the two facts. At first, oil facilities are quite vulnerable. Secondly, the market is able to quickly adapt to irregular supply. The EIA considers the long-term effect of the attack to be “extremely uncertain.”

According to the agency, in the third quarter of this year, hydrocarbon reserves have decreased by 0.9 million bpd. The EIA believes that in the first half of next year, global reserves will increase 0.3 million bpd. This will happen thanks to the countries not bound by the OPEC agreement. Obviously, it is this fact that will have the main “bearish” effect on oil quotes.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company
UFT Group

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