Slowing demand and a supply glut to drain oil's gains in 2019: Reuters Poll
(Reuters) - Oil analysts are increasingly pessimistic about the prospect of a price rally next year, when the outlook for demand is uncertain and supply is growing at breakneck speed, even though the market expects OPEC to cut output, a Reuters poll showed.
A worker prepares to transport oil pipelines to be laid for the Pengerang Gas Pipeline Project at an area 40km (24 miles) away from the Pengerang Integrated Petroleum Complex in Pengerang, Johor, February 4, 2015. REUTERS/Edgar Su/File Photo
A survey of 38 economists and analysts forecast Brent crude LCOc1 to average $74.50 a barrel in 2019, lower than the $76.88 outlook last month. The poll predicted Brent would average $73.20 in 2018, mostly in line with the $73 average for the global benchmark so far this year.
“In the first half of next year we expect upward price pressure resulting from OPEC production cuts,” said Adrià Morron Salmeron, economist at CaixaBank Research.
“Then, we expect downward price pressures from an uptick in U.S. shale production in the second half, as bottlenecks will disappear, and a deceleration of global growth.”
Of the 32 contributors who participated in both the October and November polls, 16 cut their 2019 average price forecast for Brent.
The Organization of the Petroleum Exporting Countries as well as Russia and other producers meet in Vienna on Dec. 6/7 in an attempt to support crude prices, which have fallen by over 30 percent from early October’s four-year high of $86.74.
The group ....