Oil Prices Dramatically Drop – 3 Reasons Why and What To Expect in 2019

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Last week oil prices fell down another 6% from the previous Friday, Nov.16. Both Brent and WTI crude grades have been falling over the last six weeks or so.

Nexter.org decided to find out why this happens and what to expect in 2019.

Oil price drop

On Tuesday, November 20th oil markets lost steam because of a deteriorating economic outlook as well as a surge in U.S. production outweighed expected supply cuts by the OPEC (Organization of the Petroleum Exporting Countries)

Thus, the price of January oil futures for Brent crude oil on the London Stock Exchange ICE Futures decreased by $0.36 – to $66.43 per barrel at 0608 GMT. The cost of WTI (West Texas Intermediate) crude went down by $0.23 – to $56.97 per barrel.

The United States crude oil production has soared by almost 25 percent this year, to a record 11.7 million barrels per day.

Source: oilprice

Why does this happen?

Here are three main reasons:

#1 The OPEC raised its production in September by 100,000 barrels of oil a day to 32.78 million barrels a day.

#2 allowed eight countries to continue buying oil from Iran despite U.S. sanctions on the country’s energy sector.

#3 has been consistently telling that prices should be even lower and on Monday he even wrote a tweet requesting lower prices.

Price Predictions for 2019

EIA made the predictions of oil price for 2019, saying that the price of Brent crude oil will fall to a consistent $75. In 2018 oil prices for WTI averaged $6 less than Brent crude oil in 2018 and EIA thinks that the same will happen in 2019.

Although both IEA and EIA say that global oil supply will outpace demand in 2019, higher prices could be coming. Bullish support comes once current U.S. sanctions on Iranian oil once current U.S. waivers on Iranian crude expire, as well as lower Venezuelan output and uncertainly over Libya.

BNP said that “In 2019, we expect WTI to average $69 per barrel and Brent $76 per barrel.”

But all the information that has been gathered from the futures and contracts values for January 2019 suggest that a price will range between $60 and $93 per barrel.


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Oil Prices Dramatically Drop Each Week - 3 Reasons Why and What to Expect in 2019
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Oil Prices Dramatically Drop Each Week - 3 Reasons Why and What to Expect in 2019
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Last week oil prices fell down another 6% from the previous Friday, Nov.16. Both Brent and WTI crude grades have been falling over the last six weeks or so. Nexter.org decided to find out why this happens and what to expect in 2019.
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