Oil prices seem to be bouncing back from the “Black Friday” session that saw it lose nearly 7 percent. The price increase led to oil scrapping back some of the losses in the previous session.
Brent crude futures LCOc1 were last up $1.16 on the day at $59.96 per barrel by 1044 GMT, with U.S. futures CLc1 going up 69 cents at $51.11 a barrel.
“It is difficult to say whether $60 is the new normal, as there doesn’t seem to be a ‘normal’ at the moment,” said Jack Allardyce, Cantor Fitzgerald oil and gas analyst.
“The recent weakness seems dramatic given the lack of actual catalysts – it seems to have been driven by a wider impending sense of doom amidst weak equities, geopolitics, subsequent softening demand and increasing supply,” the analyst said.
The International Energy Agency has predicted the oil demand globally to hit over 100 million barrels a year in 2019, a growth rate of 1.4 million barrels per day. However, this is down from its initial prediction in June of 1.5 million bpd.
The appreciation of the USD has undercut demand in key emerging market economies, leading to higher borrowing costs, which has threatened global growth particularly with the escalating trade war between the United States and China pushing investors out of assets such as equities or oil.
“2019 will be a choppy year for the oil market as questions surrounding the prospect of a slowing global economy and a supply surplus are expected to increase,” analysts at Fitch Solutions said on Monday.
Fitch said that even an expected supply cut led by the Organization of the Petroleum Exporting Countries (OPEC) following an official meeting on Dec. 6 “may not be enough to counteract the bearish forces”.
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