OPEC and its allies will have to do more than extend their current production agreement in order to keep crude oil prices stable next year, according to Rystad Energy.
In a statement dated December 3, the Norwegian consultancy said that world oil markets would probably be oversupplied by around 800,000 barrels per day in the first half of 2020. In turn, ample supplies are likely to lead to stock builds and push prices downward, it said.
In this case, said Bjørnar Tonhaugen, Rystad Energy’s head of oil market research, oil prices might dip by more than $10 per barrel on current levels. “If OPEC and Russia don’t extend and deepen their cuts, we could see Brent Blend dip to the $40s next year for a shorter period,” he argued.