Oil prices will remain at near current levels in 2020 as ongoing geo-political risks and OPEC-led output curbs help offset supply from other producers, said a Reuters poll on Friday.
The survey of 50 analysts forecast benchmark Brent crude LCOc1 to average $63.48 per barrel in 2020. That compares with an average of $63.76 so far this year and last month’s forecast of $63.07, said Reuters.
“Heightened tensions in the Middle East will keep upward pressure on prices, as the risk that US and Iran could accidentally enter into a direct military conflict persists.” Economist Intelligence Unit analyst Cailin Birch.
Prices are now near their lowest since October however, on fears that the coronavirus epidemic might hit global growth and oil demand, but further downside should be capped by lower output from OPEC, analysts told Reuters.
“OPEC will come close to balancing the market in 2020 and their deeper than expected cuts will provide a layer of support as oil markets remain fixated on the recent output increase with non-OPEC producers,” OANDA analyst Edward Moya said.
Most Reuters poll respondents expect OPEC and its allies led by Russia, a grouping known as OPEC+, to extend their agreement to limit supply beyond the currently agreed end date at the end of March.
“The group will be forced to maintain the current cuts at least up to end-year as non-OPEC growth will probably grow quicker than global demand in 2020,” Intesa Sanpaolo analyst Daniela Corsini said.