The oil market in 2020 is threatened by oversupply. To such conclusion the International energy Agency (IEA). Analysts are of the believe that next year demand will grow more slowly than production. As a result, in the world accumulate a surplus of oil, reported the CNBC.
The IEA lowered its forecast for demand growth for 2020 on 100 thousand Barr. a day, and now believe that daily demand will increase by 1.2 million barrels. According to the Director of energy markets and security, IEA Keisuke Sadamori on demand will negatively impact trade conflict between China and the United States, as well as events related to a British exit from the EU (Brexit), RBC reports.
The organization of countries — exporters of oil (OPEC) and some other producers, including Russia, with the beginning of the year reduced production in aggregate by 1.2 million barrels. a day. Countries have taken this step to keep prices from declining. Reduction of prices is unprofitable for the provider States.
The effect was short — both the production of shale oil increased, oil companies in the United States. They partially compensated the volume dropped from Russia and the Gulf countries. The IEA expects that next year, more oil will be produced in Brazil and Norway — and this will increase the imbalance between supply and demand.
The situation could lead to lower oil prices. According to expectations the Bank of America in the first quarter of 2020, the quotes of Brent will fall to an average of $58 per barrel. This is 4% below the current price.