‘Oil prices to slip further, driven by weak demand’ - Rizvi
Brent and US crude futures may continue to be volatile, but the overarching trend for prices is down due to sluggish demand from the world’s biggest consumers of oil.
Osama Rizvi, Energy Market Analyst at Primary Vision Network, explains why, all things being equal, $70 a barrel could be in sight.
(AI Video Summary)
Middle East tensions impact on oil prices
In this IGTV video interview, Osama Rizvi, an Energy Market Analyst and Geopolitical Analyst at Primary Vision Network, talks to Angeline Ong about the rising tensions in the Middle East and how they could affect oil prices. He explains that although the tensions are important, they haven't caused a big increase in oil prices because of the balance between supply and demand. Rizvi believes that the oversupply of oil and the global economic slowdown will push oil prices down.
There are two main reasons behind Rizvi's negative outlook on oil prices. First, he mentions that non-OPEC countries are expected to add 1.5 million barrels of oil per day to the global supply. Second, he points out that manufacturing and economic indicators have been declining all over the world, including in China, Europe, the US, and the UK. This overall slowdown in the global economy adds more pressure on oil prices.
Rizvi then talks about OPEC and the challenges it faces in trying to stabilise prices. He highlights the increase in non-OPEC supply, particularly from the US, as a major obstacle for OPEC. He also mentions that Saudi Arabia has lowered its oil price to adapt to the global economic slowdown. Looking into the future, Rizvi expects OPEC to hold off on making any major decisions in their upcoming meeting, and he suggests that there might be a supply war similar to the one we saw in 2014.
Oil price predicitions
As for price predictions, Rizvi believes that Brent crude oil prices will average around $78 to $80 per barrel for the year, but they could fall even further if tensions in the Middle East ease. He also mentions that hedge funds and money managers have been negative about oil prices, and overall market sentiment is also bearish. Without the tensions in the Middle East, Rizvi thinks that oil prices could drop into the lower 70s.
To sum it up, Rizvi's analysis emphasises the challenges the oil market is facing, including oversupply and a slowdown in the global economy. He expects these factors to push oil prices down, and if the tensions in the Middle East ease, prices could drop even further.
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