Geopolitical tremors mean a choppy outlook for oil in 2019

Get used to more scary oil market volatility in 2019. This is the message coming from leading industry strategists and forecasters after a bruising end to last year, when Brent crude dipped below $50/b. Although the benchmark has recovered along with major global stock markets, forecasters are concerned about the prospects of a sustained rebound. Unpredictable geopolitical upheavals like Brexit and US President Donald Trump’s trade wars are expected to weigh more heavily on sentiment than the fundamentals of supply and demand. “One of the key lessons learned in 2018, painfully by some, is that market sentiment can shift violently without much change in fundamentals, requiring a steady, holistic perspective,” said Chris Midgley, global head of analytics, S&P Global Platts. “It is clear that this volatility will remain a feature across the energy markets in 2019.” Global demand is becoming harder to predict. The world consumed on average a record 100 million barrels per day of crude in 2018 but the positive outlook is being clouded by weaker economic growth. The Paris-based International Energy Agency (IEA), in its final market report of the year, kept its demand growth figure unchanged at 1.4 million b/d, blaming a weakening economy for offsetting… continue reading

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Source: CTRM Center

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