• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 11 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 22 hours How Far Have We Really Gotten With Alternative Energy
  • 2 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 2 days Bankruptcy in the Industry
  • 3 days The United States produced more crude oil than any nation, at any time.
Geopolitical Tensions Fail to Spark Oil Price Surge

Geopolitical Tensions Fail to Spark Oil Price Surge

The fluctuating prices in response…

Is $100 Oil Within Reach?

Is $100 Oil Within Reach?

We have a situation where…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Oil Prices Are Unlikely To Break $40 This Year

Oil trader

Despite production cuts from OPEC+ and North America and slowly improving demand, oil prices are not expected to average much higher than current prices in 2020 because of renewed U.S.-China tensions, the monthly Reuters poll of dozens of oil analysts showed on Friday.

According to 43 analysts surveyed by Reuters, the U.S. benchmark WTI Crude is set to average $32.78 a barrel in 2020, which is roughly where the contract was trading early on Friday.

Brent Crude prices are expected to average $37.58 per barrel this year, the analysts in the Reuters poll predicted. Experts have lifted their forecasts for both benchmarks compared to the April poll, when WTI Crude was expected to average $31.47 a barrel and Brent Crude was seen averaging $35.84 per barrel.

So far this year, Brent Crude prices have averaged $42.37 a barrel.

Early on Friday, oil prices were down on the day more than 2 percent and on track for a first weekly loss in five weeks. However, after the ‘black April’ for oil demand and oil futures, this month the price of oil has rallied by nearly 40 percent, so despite being on course for a weekly loss, prices were on track to score the best monthly performance since March 1999.

For the average prices in 2020, analysts expect the cuts from major producers in and outside the OPEC+ pact and the recovering demand to support oil in the coming months. However, renewed U.S.-China tensions over China’s new security laws for Hong Kong have been weighing on equity and oil markets in recent days. The analysts polled by Reuters expect that price gains from improving fundamentals could be capped by flare-ups in the U.S.-China relations, which could damage the post-coronavirus economic recovery and trade.

Earlier this week, Morgan Stanley said it expected Brent Crude to trade at $40 a barrel by the end of the year thanks to the recovery in demand, which has taken off faster than the bank had predicted.

By Tsvetana Paraskova for Oilprice.com


More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on May 29 2020 said:
    While the average Brent oil price may or may not break above $40 a barrel in 2020 because of collapsing prices and demand in the first four months of the year, the price will rise to $45-$50 in the second half of this year even touching $60 in early next year.

    Some powerful bullish factors could be aiding the surge of oil prices. The first is China’s huge thirst for oil as judged by the rise of Chinese oil imports even above 2019 levels in spite of the coronavirus outbreak. The second factor is the accelerating easing of the global lockdown. And the third factor is that US shale oil industry will emerge so emaciated from the coronavirus ordeal that US crude oil imports could be expected to rise from 9 million barrels a day (mbd) in 2019 to an estimated 11-12 mbd in the next two years.

    Still one bearish factor could be lurking behind the scenes, namely a resumption of trade war between the United States and China.

    The intensifying anti-China rhetoric in the United States and direct attacks on China by President Trump mean that he is preparing to break the truce reached in December 2019 and resume the trade war immediately after the US exits the lockdown. He will not fare better than the previous time since the US economy will emerge from the outbreak so weakened that it won’t be fit enough to resume the trade war with China. By exiting the lockdown much earlier than the United States, China has stolen a march on the US economy.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News