Oil Price Paths in 2019: Navigating Volatile Markets
After a sharp fall towards the end of 2018, oil prices in 2019 started on a positive note recovering some of their losses. From the low point of $50/b reached on 28 December, the daily Brent price has increased to above $60/b with many analysts now expecting another year of sustained price volatility driven by a wide uncertainty pertaining to global supply and demand trends. But unlike 2017 and 2018, the woes engulfing the oil market in 2019 have extended to the demand-side. The prospects of the global economy and its potential impact on global oil demand, as well as the ability of OPEC+ producers to successfully enforce the agreed or even implement future deeper cuts (if necessary) to rebalance the market in the face of negative demand shocks are at the core of the current debate. Also, the unfolding geopolitical developments in Iran and Venezuela are expected to play a pivotal role in shaping oil market outcomes in 2019. In this Energy Insight, we revisit the main factors that shaped oil market dynamics in 2018 and analyse how the oil price path could evolve in 2019 by evaluating the prevailing risks underlying the world oil market using real-time forecast scenarios of the Brent price.