The protracted U.S.-China trade dispute and slowing economies and oil demand growth made analysts slash their forecasts for WTI Crude prices this year to the lowest outlook since January 2018, the monthly Reuters poll showed on Friday.
According to 51 analysts and economists polled by Reuters, WTI Crude will average US$57.90 a barrel this year, down from the US$59.29 per barrel forecast in last month's survey. WTI Crude prices have averaged US$57.13 this year and traded down 1.36 percent at US$55.94 at 08:17 a.m. EDT on Friday.
Analysts also slashed their forecast for the average Brent Crude price this year-to the lowest 2019 average forecast since March 2018. Experts now see Brent Crude averaging US$65.02 per barrel this year, down from the US$67.47 forecast in last month's poll. So far this year, Brent Crude has averaged US$65.08 a barrel, while the international benchmark was down 0.6 percent at US$60.13 early on Friday.
Analysts cited the U.S.-China trade war and slowing growth in global economies as the key reasons for the significantly lowered oil price forecasts this month. Middle East tensions, monetary policies to support economies, the U.S. sanctions on Iran and Venezuela, and slowing U.S. shale growth could lend some support to oil prices, but right now the focus is on slowing economies and faltering oil demand growth, according to the analysts polled by Reuters. Related: BP Exits Alaska To Double Down On Shale
Several Wall Street investment banks have already warned that the escalating U.S.-China trade war raises the odds of an economic slowdown and subsequent low oil demand growth. Some banks have already cut their oil demand growth estimates for this year, saying that oil demand could grow at its slowest pace in at least half a decade.
The U.S. Energy Information Administration (EIA) lowered earlier this month its global oil demand growth outlook for 2019 to 1 million bpd.
The International Energy Agency (IEA) also revised its demand growth estimates for 2019 this month, down by 100,000 bpd to 1.1 million bpd, after seeing that between January and May demand growth was just 520,000 bpd, the lowest increase for the period since 2008.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More