World may face ‘low price scenario’ for oil this year if OPEC plan fails, JP Morgan warns www.rt.com
Global benchmark Brent will remain at around last year’s lowest point in 2019 if OPEC members do not stick to the agreed output cuts, JP Morgan’s head of Asia Pacific oil and gas believes.
The Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers sealed a deal on production cuts in early December in an attempt to boost the market. The cartel and its partners agreed to curb crude output by 1.2 million barrels per day (bpd), briefly sending oil prices up, before they slumped to the lowest point in more than a year.
“Well, J.P. Morgan said prior to the OPEC meeting early December, that if OPEC didn’t really cut by more than around 1.2 million barrels per day, and they did just for the first half, (not) for the full year, that we could gravitate toward... our low-oil-price scenario, which is $55 Brent for 2019,” JP Morgan’s Scott Darling told CNBC on Wednesday.
Brent hit the lowest point since August 2017 on December 25, falling below $51 per barrel. It came amid worries about global oversupply that were partly triggered by a US energy agency forecast saying that oil production from seven major American shale basins is expected to surpass 8 million barrels per day by the end of the year. At the same time, the market was spooked by the Federal Reserve’s interest rate hike.
Published Date:2019-01-04