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FX.co ★ Oil price forecast for autumn

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Analysis News:::2020-09-29T12:04:01

Oil price forecast for autumn

Oil price forecast for autumn

The oil price roller coaster ride continues. Prices rose amid a high level of compliance with the OPEC+ deal after falling the day before. In August, the group fulfilled its obligations by 102%. Moreover, Norway is cutting the production of oil by 20%, as oil companies and trade unions have failed to resolve their contradictions. In addition, last week, the US oil reserves fell by 1.64 million barrels.

So, on Monday, Brent rose to $42.9 per barrel, and WTI advanced to $40.6 per barrel.

So what will happen to oil prices in the following months? The dynamics of prices directly depend on the introduced quarantine measures. Experts say that a repeated global quarantine will lead to a fall in demand for petroleum products, and this, in turn, will put pressure on oil prices. Otherwise, if the quarantine is not strict, then a rise in prices is possible thanks to a seasonal increase in consumption. Experts are more inclined towards the second case.

However, it is difficult to predict now, as there is still a risk of the second wave of coronavirus in the world. Some countries such as Spain, the Czech Republic, Great Britain, South Korea and others have already tightened measures to stop the coronavirus spread. In any case, this will affect the global oil demand and oil products, as air and transport travel will be limited. Moreover, Libya returned to the market and increased production to 250,000 barrels per day. In other words, it is unlikely that prices will go up.

According to some reports, more than 33 million cases of coronavirus infection have been recorded in the world. More than a million people have died.

By the way, on Monday, Democrats in the US Congress decided to approve another $2.2 trillion package to stimulate the economy, while the country's national debt is still enormous. This may probably lead to an increase in oil prices. However, it will take a long time for this to happen.

Nevertheless, experts say that a strong collapse in prices will not happen either. The reason for this is problems with production in the United States. There are few operating rigs, and in order to increase their number, WTI should cost more than $50 per barrel. According to Saxo Bank's head of strategy, Ole Hansen, the price of Brent crude will range between $39.50 and $43.60 per barrel.

Analyst InstaForex
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