Oil and Gas Forecast
Based on a forecast of slowing oil supply growth and mostly stable oil demand growth, EIA expects global oil inventories will fall by almost 0.2 million b/d in 2021. Given the expectation of inventory builds in 2020 and draws in 2021, EIA forecasts Brent prices will average $65/b in 2020 and $68/b in 2021.
The year 2019 was rather a balanced one for oil prices, as the early rise was evened out in the rest of the year. The US-China trade war fueled the global economic slowdown undermined the efforts of the Organization of Petroleum Exporting Countries (OPEC) and its allies to balance the crude market and ramp up oil prices.
Stepping into 2020, the oil industry is on a verge of witnessing a massive shake-up, in the face of the International Maritime Organization (IMO) regulations –IMO 2020– effective from January. Further, the global economic slowdown appears to have bottomed out while oil demand growth outlook has turned upbeat, calling for higher prices next year. The upside potential in oil prices, however, may be limited by a likely US-China trade re-escalation and dwindling Chinese oil demand.