Despite global trade uncertainties fuelled by feuding trading countries & stricter emissions regulations, the outlook for growth in the Middle East remains strong. Amy McLellan reports
Nothing is normal anymore. Once the loss of supply from two of the world’s largest oil producers, Venezuela and Iran, would have triggered a surge in oil prices. Once a decision by OPEC to sustain production cuts of 1.2 million barrels per day in co-operation with Russia, the world’s second largest oil producer, would have added to supply-side fears and boosted that rally.
But nothing is normal anymore. Oil prices may have added almost ten dollars since the start of the year, with benchmark Brent up 25% at $68 a barrel since January, but you are as likely to hear analysts bearishly debating high inventories, surging North American production and slowing global demand as you are to hear bulls forecasting a price spike.
Indeed, despite all the geopolitics of sanctions and trade wars, it seems the fundamentals are little changed for the next 24 months. ‘Wood Mackenzie has adjusted our annual average price forecast for Brent by just one dollar – from $66/barrel for 2019 to $65/b per barrel,’ says Ann-Louise Hittle, vice president, macro oils at Wood Mackenzie.
‘Our forecast of $68/b for 2020 remains unchanged.’