“Despite dramatic slides in the oil market, some forecasters remain positive on prices and demand going into 2019,” reports CNBC. “A year ahead outlook report from Bank of America Merrill Lynch expects Brent crude to regain its recent losses in 2019 and settle at $70 a barrel. But amid mounting global uncertainty on everything from trade and monetary policy to politics, that forecast is far from consensus.”
Production Outlook
While many market observers typically look to OPEC for clues regarding production forecasts, increasingly OPEC member Saudi Arabia, the U.S. and Russia are dominating the global oil output conversation. The U.S. and Russia are not OPEC members, but the countries are two of the world’s largest oil producers. The U.S. recently became a net oil exporter for the first time in 75 years and Russia is pumping at post-Soviet era records.
“In addition to American shale producers firing on all cylinders, the impact of higher inventories in countries like Iraq and Brazil on market fundamentals is something the Saudi-Russia cut may not be able to fully counter,” according to CNBC.
Oil prices have previously hit multi-year highs in mid-2018 after President Donald Trump withdrew from the Iran nuclear deal, which reinstated sanctions against the Middle Eastern country’s crude exports. Iran’s oil shipments have since declined by over a third and analysts expect more than a million barrels per day could be cut off from the market by the first quarter of 2019.
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