Crude oil prices have fallen into the lowest area since April. Brent futures have been trading below $43 per barrel. The contracts even hit the level of $41.82, the lowest mark since April. The problem of oversupply still flusters the market. In particular, huge stocks of petroleum products place in question demand from oil-refining plants. Moreover, weaker-than-expected economic expansion in the US is another negative factor for crude oil consumption.
Analysts at Goldman Sachs forecast oil prices to remain low in near future, in a range of $45-50 per barrel until mid-2017. Reports about a production increase in the OPEC members and an advance in active oil rigs in the US also depress the market. Experts predict the OPEC’s oil production to rise to the highest level in contemporary history in July. However, despite all of this, many economists share some optimism. For instance, the Iranian Minister of Oil Industry said the balance of demand and supply is likely to recover. Barclays forecasts an average price for oil at $46.50 a barrel in the third quarter.
Oversupply continuously exerts pressure on oil prices in the global market. Hopes for an increase in demand stay very weak. The worsening macroeconomic picture and the strategy of Saudi Arabia are very unlikely to compel the rest of producers to restrain their production.
