Oil: OPEC sounded the reasons of falling prices until the end of the year

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According to the published report from OPEC on the oil market, forecast until the end of the year can be considered bearish.
This is due to several reasons. First, OPEC lowered its world oil demand to 1.1 million barrels per day. Second, the offer could grow by almost 2 million barrels per day, essentially ahead of demand.
Also in a global sense, the oil market has the pressure of oversupply in the OECD countries, as stocks there rose to 31.8 million barrels per day since the beginning of summer. And it is precisely in the period when the OPEC countries decided to extend the reduction of oil production in the first 9 months.
According to OPEC, oil demand in 2020 could increase by only 0.1 million barrels per day, which is not so much. OPEC countries account for the uncertainty associated with the result of trade wars between the US and China and the geopolitical situation. At the moment they ensure that quotes are balanced near the price level of $60 per barrel.
The apparent underlying growth drivers in the short term should not expect, therefore, the participants of the commodity market will focus on publication of data from the energy agencies of the United States. In these periods the volatility can rise sharply, and prices change in one direction and then the other. Large investors are focused on the OPEC meeting early next month in Abu Dhabi – there will be discussed the future strategy for the global oil market.
In the current market conditions Brent crude will trade below $60 a barrel – around $59,13, shale and WTI will not exceed the level of $56 per barrel.
Gaidar Hasanov
“International financial center”