Oil to stick to narrow price band early 2020
Opec cut will be more than offset by higher output elsewhere before asserting itself
Houston (Bloomberg): Oil prices are likely to remain in check during 2020 as Opec+ production cuts are offset by higher output from other countries and a mixed outlook for demand.
Analysts see prices climbing higher in the middle of the year as stronger emerging market demand and the Opec+ cuts trim global inventories. Saudi Arabia surprised the market in early December with a deeper supply cut, which, along with signs of a thaw in the US-China trade conflict that may boost demand, lead some prominent analysts to revise their forecasts higher.
Goldman Sachs Group Inc. increased its estimate for Brent crude to $63 a barrel from $60, according to a note from analysts. “This points to a tighter inventory path than we previously expected, especially through first-half of 2020.”
West Texas Intermediate will average $58.50 a barrel in 2020, according to the median of analyst estimates compiled by Bloomberg since the OPEC+ meeting in early December. That compares to the current level of around $60 and the average so far in 2019 of $56.95.
Brent is forecast to average $64.25 a barrel.