Oil will remain below $40 due to coronavirus shock and OPEC + collapse

The price of oil in 2020 will be kept below the level of $40 per barrel. This conclusion was reached by Reuters experts, having analyzed the prospects of the current situation in the world. Currently, measures to curb the global spread of coronavirus adversely affect oil demand, and the collapse of the OPEC+ contributes to an increase in the surplus of raw materials.

Analysts expect the average Brent price to be $38.76 per barrel this year. Today, Brent and WTI are trading just above $20 a barrel. Moreover, back in January, the cost of «black gold» exceeded the current price by 70%.

Pressure on the oil market is exerted by restrictions related to coronavirus and weakening demand, as well as the price war between Saudi Arabia and Russia, which caused the flood of the market with raw materials.

Experts predict that global oil demand may decline by 0.7-5.0 million barrels per day in 2020, which will be the maximum reduction since the financial crisis in 2009.