Experts lower oil price forecasts amid US-China trade war

Experts began to lower oil price forecasts amid the trade war between the United States and China. According to Fitch Solutions, the average price for Brent this year will be $ 67 per barrel instead of the previously expected $ 70. Moreover, until now Fitch Solutions had expected prices to rise to $ 76 and $ 80 per barrel in 2020–2021, but now it expects a decrease to $ 65 and $ 61 per barrel, respectively. According to experts, the trade conflict between the United States and China, which are the largest consumers of oil in the world, could be the main reason for the slowdown in economic growth, lower global demand for oil and falling oil prices (for example, on August 5, oil prices fell below $ 60 per barrel).

The next round of the trade and economic crisis between the two countries occurred on August 1, when US President Donald Trump unexpectedly announced introduction of duties on the remaining unimpaired volume of Chinese imports of about $ 325 billion, despite an agreement on a trade ceasefire reached at bilateral meeting with Chinese President Xi Jinping at the end of June.

It is believed that the key reason for maintaining oil prices and reducing their volatility is the OPEC + pact to limit oil production, despite the fact that the United States in these conditions continues to increase shale oil production (about 11.7 million barrels per day in July).

source: fitchrating.com