NEW YORK (Capital Markets in AfricaA) \u2013 Oil prices will rise over the next few months as global inventories shrink, before declining in 2020 as trade-war induced demand woes return to haunt the market, according to UBS AG.<\/p>\n
The Swiss bank sees\u00a0Brent crude\u00a0climbing to $65 a barrel in three months, around 8% higher than current levels, it said in a note by analysts including\u00a0Giovanni Staunovo. However, the global benchmark will drop to $63 in six months and $60 in 12 months, UBS said.<\/p>\n
While seasonal supply-demand dynamics should support crude for the rest of this year, the U.S.-China trade dispute will re-emerge as the main price driver in 2020, the lender said. It cut its global gross domestic product growth forecast for next year to 3.4% from 3.6% and also lowered its estimate for oil consumption expansion to 1 million barrels a day from 1.2 million.<\/p>\n
\u201cIf trade tensions escalate, oil demand growth could soften even more next year and pose downside risks to our new forecasts,\u201d the analysts wrote. \u201cThe three fragile oil-export countries (Venezuela, Iran and Libya) still may influence the outcome for 2020\u201d in either a bullish or bearish way, they said.<\/p>\n
UBS also cut its\u00a0West Texas Intermediate\u00a0projections by $5 a barrel to $58 in six months and $55 in 12 months. WTI is currently trading near $56 a barrel.<\/p>\n
On the supply side, the lender sees the Organization for Petroleum Exporting Countries and its allies likely extending the production-cut agreement that runs through the end of the first quarter. But a small increase in non-OPEC output and the drop in demand growth mean the market will be oversupplied by around 500,000 barrels a day in 2020, it said.<\/p>\n
Source: Bloomberg Business News<\/p>\n","protected":false},"excerpt":{"rendered":"
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