According to Rystad Energy’s estimates, the global oil market will be fundamentally oversupplied to the tune of 0.8 million barrels per day (bpd) in the first half of 2020.
A 1 million bpd surplus of oil can be expected to cause an oil price decline of around 5 per cent per month, implying a potential drop of 30 per cent over six months, Rystad estimates.
“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,” Tonhaugen said. Brent futures were trading just under US$61 per barrel this morning.