Banks expecting WTI to rebound to $70 in 2019 - Bloomberg
According to reporting by Bloomberg, major banks are anticipating crude oil to rebound over the 50% mark of 2018's decline in the first half of 2019.
Despite plans by OPEC and its allies to limit production next year to prevent a glut from forming, oil’s fortunes have increasingly been driven by moves in financial assets and concerns about the global economy. However, analysts expect markets are about to tighten as growth stays strong, OPEC’s supply cuts kick in, and unintended losses in Venezuela and Iran escalate.
“We could even see something similar to a V-shaped recovery next year, on two very important conditions,” said Michael Cohen, head of energy and commodities research at Barclays Plc in New York. “One, that the reduction in OPEC exports leads to a reduction in inventories. And two, that we don’t see a further deterioration in macroeconomic conditions.”
“Fundamentally speaking, we believe that prices are nearing a bottom,” said Michael Tran, commodities strategist at RBC Capital Markets LLC. “Global supply and demand should reach a fine balance next year.”