Oil Price Forecasts for 2020: A Summary of Key Predictions


Oil prices saw persistent rollercoaster rides in 2019, amid a trade war between the U.S and China, crisis between Iran and Saudi Arabia, fighting in Libya and growing uncertainty about the world economy. In 2020, several major analysts firms believe that oil prices will fall and see no growth at all amid a supply glut due to slower demand, increasing shale reserves in the U.S. and a boost in production from the non-OPEC countries.

OPEC and its non-OPEC allies will meet in Vienna, Austria, next week. But ahead of the meeting, Fatih Birol, the Executive Director of the International Energy Agency (IEA), told Reuters in an interview that global oil supply glut is looming over the economy, as non-OPEC members are adding more oil than expected in the market. According to IEA, non-OPEC countries are expected to add a whopping 2.3 million BPD to their supply in 2020, while global oil demand growth is expected at 1.2 million BPD.

Goldman Sachs believes that oil prices in 2020 will continue to stay around $60 per barrel. The bank said in a note that increasing non-OPEC supply will offset slow activity in U.S. shale and OPEC cuts. The bank also said that “worsening” growth and tensions in the Middle East will hurt oil prices in 2020.

The data on oil supply expectations also depicts a bleak picture. For 2019, EIA cut its Short-Term Energy Outlook on growth to 900,000 BPD from 1.3 million BPD. For 2020, the group expects demand growth of 1.3 million BPD. OPEC, on the other hand, is expecting a demand growth of 1.08 million BPD for 2020.

Another interesting forecast on oil price 2020 comes from Sanford C. Bernstein & Co. which sees a major increase in oil production in 2020. However, the firm believes that 2020 will see oil production peaking, after that there will be a fall in supply, resulting in some recovery in oil prices. The firm cites two famous shale companies that have predicted a downturn in the future.

In a Reuters poll earlier this year, analysts cut their forecast for oil price to the lowest in 16 months, citing a softening demand and the trade tensions between the U.S. and China. A total of 51 economists and analysts see Brent crude LCOc1 averaging at $65.02 a barrel in 2019.