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Longer term oil market analysis

Once a year we publish a thorough analysis on the oil market where we give our take on the oil market development in the year to come.

THE ANNUAL MARKET ROUNDUP AND LONG-TERM FORECAST.

The outlook - published as a pdf and sent by e-mail - includes

  • an analysis of the oil market
  • a summary of issues most likely to affect oil prices over the coming year
  • a breakdown of each issue, with a probability rating for each scenario
  • an expanded price forecast table for a range of products
  • fuel price forecasts for the world's major fuelling points
  • U.S. inventory situation forecasts
  • geopolitical issues that are likely to impact the oil market

 

Read more about:

Choosing the right partner Hedging tools Oil inventory report

 

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The outlook in less than 60 seconds....

From peak to trough, Brent prices dropped by more than 40% in Q4-2018. Higher than expected supply as well as heavy equity markets weighed on oil prices. For the current year we expect volatility to continue, though averaging higher levels than seen at time of writing.

The U.S., China and Emerging Markets are all expected to continue to expand at a moderate pace, though a trade war, and rising interest rates are pulling in the other direction.

On the fundamentals side, world oil supply continues to increase, especially the three major oil producers U.S., Saudi Arabia and Russia produce at or near record levels; driving up crude oil supply by almost 3 mio. barrels per day during 2018. Starting this January, OPEC and some non-OPEC oil producers will implement a 1.2 mio. barrels per day production cut as per agreement from December 2018. Demand for oil has also increased – by 2.6 mio. barrels per day in 2018 with huge intra-year fluctuations. Expectations for demand growth this year are lower, but the current U.S. pipeline bottlenecks could be solved later this year, pushing more oil to the market.

U.S. sanctions on Iran and potential bans on countries importing Iranian oil took centre stage on the geopolitical front in 2018. Turned out that waivers were granted on the imports and other oil producers ramped up production to offset the missing Iranian oil barrels.

 In our special feature article we look into the pipeline capacity in the U.S., the outlook for capacity expansion and potential impact on oil prices. 

 

GOSI - Global Oil Strength Index

GOSI is the Global Oil Strength Index - an index created to evaluate important issues and the effect on oil prices. It answers the basic question: “Are oil prices going up or down from here?”
A high rating is bullish for oil prices and a low rating is bearish. In other words, the index is a lot of information boiled down to one number that indicates whether prices should go up or down.

 

 

  Oct. 18 Jan. 19 Comments
Fundamentals 55 55 World oil supply continues to increase, especially the three major oil producers U.S., Saudi Arabia and Russia produce at or near record levels.Expectations for demand growth this year are lower, but the current U.S. pipeline bottlenecks could be solved later this year, pushing more oil to the market. All in all, we set fundamentals to slightly bullish for oil prices this year.
Financials 50 55

The financials in general look neutral for oil prices as the major economies, U.S., China, and Emerging Markets, all show continued economic growth. Dark horses to the growth figures are the trade war between the U.S. and China along with the increasing dollar’s pressure on Emerging Markets.

Geopolitics 60 55 U.S. sanctions on Iran and potential bans on countries importing Iranian oil took centre stage on the geopolitical front in 2018. Turned out that waivers were granted on the imports and other oil producers ramped up production to offset the missing Iranian oil barrels. We set geopolitics to neutral for oil prices.
GOSI 54 55 GOSI is above the 50 level - indicating that our oil price expectation is bullish.
Annual oil market outlook
Published on our website and sent by e-mail

Once a year we publish a thorough analysis on the oil market where we give our take on the oil market development in the year to come.

Fill in the form below to subscribe to the annual oil market outlook