An energy information provider, Argus Media stated that an oversupply of oil will ensure the prices are under intense pressure even after entering the New Year. However, with the passing time, the cuts of the producers will ensure the crude prices are boosted. This condition refers to the scenario in which the balance between the supply and demand will be established. In fact, the editor for Crude Oil at Argus, Azlin Ahmad stated that the prices will stabilize by the end of the second quarter. Argus Media has also forecasted that the Brent crude will trade at $65 each barrel in the first quarter while increasing by $3 each barrel in the second quarter. By the end of the third quarter, the prices per barrel will reach $70 per barrel. It has stated by the end of the year, prices per barrel may hike up to $80.
During October, the oil prices spiked to a level that broke all the records of the past 4 years. However, the prices have dropped by a third of the peak price. The international benchmark, Brent Oil futures were trading at $53.60 a barrel, which is a steep decline of 20% witnessed in 2018. This year, the story may take a different turn as the prices are about to catch the pace in the upcoming year.
Russia along with non-OPEC and OPEC oil producers have agreed that the output will be curbed by none less than 1.2 million barrels every day. The quantity is 1% of the comprehensive global demand.
The organization that is crewed with 15 members stated that it has planned to reduce the output of total numbers of barrels by 800,000 barrels every day while allied non-OPEC oil producers will add to the endeavor of reducing the oversupply by cutting down 400,000 barrels every day.