• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 33 mins Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 5 hours China's Blueprint For Global Power
  • 1 min IMO 2020:
  • 12 hours World Stocks Drop And Futures Tread Water After China Reports Worst GDP Growth In 30 Years
  • 2 hours Brexit agreement
  • 3 hours The Ultimate Heresy: Technology Can't Fix What's Broken
  • 19 hours National Geographic Warns Billions Face Shortages Of Food And Clean Water Over Next 30 Years
  • 16 hours Why did Aramco Delay IPO again ? It's Not Always What It Seems.
  • 20 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 20 hours ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 12 hours Deepwater GOM Project Claims Industry First
  • 19 mins Idiotic Environmental Predictions
Alt Text

Oil Slides On Trade War Anxiety

Oil prices dropped on Tuesday…

Alt Text

The Cheapest Oil Ever Sold

If history tells us anything,…

Rystad Energy

Rystad Energy

Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products. Rystad Energy’s…

More Info

Premium Content

Three Essential Factors For Oil Prices In 2020

Three essential factors will determine the direction of the oil price next year, according to Rystad Energy.

In a market update, Bjørnar Tonhaugen, head of oil market research at Rystad Energy, argues that a balanced oil market in 2020 is contingent on these pillars:

  1. No global recession
  2. Continued OPEC production cuts
  3. The effect of new IMO 2020 regulations

“Markets can balance with an extension of OPEC cuts through 2020, as we believe the IMO 2020 regulations will create more demand for crude oil. Moreover, the global economy needs to avoid a sharp slowdown and oil demand recover to more normal growth rates of between 1 million and 1.2 million barrels per day,” says Tonhaugen.

“If the stars fail to align, however, OPEC may need to discuss much deeper cuts to support the market,” Tonhaugen added.

In its latest Oil Market Balances Report, published this week, Rystad Energy finds that the market can come into balance in 2020, even at current oil prices, as our latest revisions suggest a call-on-OPEC crude oil reaching 30.1 million barrels per day (bpd) next year, compared to 29.5 million barrels per day in last month’s report. Related: Global Economic Slowdown Hits China’s Natural Gas Demand

However, a balanced market next year also implies that the global economy does not enter a technical recession and that demand recovers to around 1.2 million bpd growth. OPEC needs to maintain current production levels, with extended cuts through at least 2020, while the introduction of stricter shipping fuel regulations – the so-called IMO 2020 effect – will cause a net positive effect on crude demand growth next year of about 1.0 million bpd in order to balance the global gasoil market.

“Without the expected additional crude runs in 2020, on top of the normal growth in refinery runs to keep up with overall products demand without IMO 2020, prices will be even lower next year – unless OPEC cuts its production to around 29 million bpd in 2020,” Tonhaugen remarked.

Rystad Energy forecasts that crude oil and lease condensate production growth outside of OPEC and Russia will reach 2 million bpd in 2020, down 0.2 million bpd from our previous estimate. The US oil supply forecast for December 2020 is revised down by 0.5 million bpd to 14.0 million bpd, which represents a yearly addition of 1.15 million bpd, according to the independent energy research firm.

By Rystad Energy

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play