Despite the slight recovery in oil prices on the last day of 2018, the benchmarks were set for their first total annual decline since 2015, according to Reuters, pointing out that since the beginning of trading in Asia today, Brent and West Tekas Intermediate have grown about 1 percent each.
There seems to be excessive oil uncertainty due to a stronger recovery, after prices began to fall in early October, after rising earlier this year to over $ 80 a barrel for Brent, albeit short. Concerns about global economic growth and subsequent moves in a trade war between the US and China are among the most important factors. OPEC's latest decision to start cutting production since January is also a consideration, although price trends over the past few months suggest that the market was disappointed with the level of decline.
President Trump has indicated that a deal with China may be in progress, but uncertainty is likely to last until such an agreement is made public. The trade agreement between the world's largest oil producer and one of the largest consumers would certainly be a bull for oil, as well as improved outlook for the global economy – also linked to an agreement between the United States and China.
In fact, despite this year's total loss, investment bank analysts will soon begin to increase the reference value of crude oil. Bloomberg's research among analysts shows that the feeling will change in the new year, with the consensus on Brenta's raw material worth $ 70 per barrel.
According to researchers, demand for oil will remain strong in 2019, OPEC's cut will work to boost prices, and losses in production in Venezuela and Iran will boost the bullish effect.
"We could even see something like a letter-like recovery in the next year, in two very important conditions," said Michael Cohen, Barclays, adding that the conditions were: "One is that reducing OPEC exports leads to a reduction in inventories. And secondly, let's not see further deterioration in macroeconomic conditions. "
Bi Irina Slav for Oilprice.com
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