OPEC views that the supply of oil will continue to cut in the rest of 2020. The market is not ready to give up production cuts this year.
OPEC and its allies agreed to cut more supply of 500,000 barrels a day in December 2019 until their next meeting in March 2020, and the total cut was reduced to 1.7 million barrels per day.
However, the duration of the agreement remains uncertain. The energy alliance usually meets every six months, so the announcement of a meeting in March made some analysts believe that strict policy will continue only in the first quarter of 2020.
Oil price forecast
There is basically a market in which excessive supply prevails. Prices are expected to stabilize around $ 65 a barrel in the first half of this year and about $ 64 a barrel during 2020.
Black Swan Events for the market – rare and unpredictable events with serious consequences, geopolitical tensions in the Middle East, and ongoing US-China trade war and similar events are likely to temporarily affect prices. Geopolitical events will continue to play a role in 2020. This has already been tested many times during 2019.
The US-China trade dispute and the general health of the global economy depends on the availability of the product, and a logical handling of supply output will continue to play an equally important role in keeping prices in balance.