Despite a slight recovery in oil prices on the last day of 2018, benchmarks have been set for their first total annual decline since 2015, Reuters reported, noting that since the start of trading in Asia today, crude oil Brent and Western Texas middleweight have acquired with about 1 percent each.
There seems to be a lot of uncertainties about oil for a stronger recovery after prices began sliding in early October, when earlier this year they gathered at over $ 80 a barrel for Brent, albeit briefly. Concerns about global economic growth and the next steps in the US and China trade war are among the main factors in the game. OPEC's latest decision to begin cutting production in January is also a consideration, although price trends in the past few months suggest that the market is disappointed with the level of cuts.
President Trump pointed out that the deal with China could be in progress, but the uncertainty is likely to continue until the moment when such an agreement is announced. The trade agreement between the world's largest oil producer and one of the largest consumers will surely be bullish for oil, as well as improving the prospects for the global economy – also linked to an agreement between the United States and China.
In fact, despite the overall loss this year, the crude oil reflections are seen by analysts of investment banks, which will soon begin to grow. Bloomberg's research among analysts suggests that the feeling will change in the new year, with a consensus on Crude Oil Brent at $ 70 a barrel.
According to researchers, demand for oil will remain strong in 2019, OPEC reduction will work to support prices, and production losses in Venezuela and Iran will boost the bullish effect.
"We can even see something similar to the V-shaped redevelopment next year, in two very important conditions," said Michael Cohen of Barclays, adding that the conditions are "One," that the reduction in Opel's exports leads to a reduction in inventories. Both, that we do not see further deterioration in the macroeconomic conditions. "
By Irina Sloven for Oilprice.com
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