Moody's predicts that oil prices will remain volatile and settle into $50-$70 per barrel range. According to the agency’s estimates, the cost of natural gas will bounce between $2.50 and $3.50 per 1 million British thermal units (BTU).
Experts believe that recent volatility reflects investors’ concerns about the weakening global economy, higher Saudi and Russian oil production, as well as mixed signals on Iran sanctions, and financial speculation.
Last week’s announced production cuts by OPEC+ countries will contribute to more balanced market. The cartel plans to reduce the level of oil production by 800 thousand barrels per day from January 2019, while independent oil producers intend to cut output by about 400 thousand barrels per day. The new agreement is expected to stabilize global demand and supply in the oil market, Moody's notes.
