As if fears of a global economic slowdown weren’t mounting high enough already, the oil industry, one of the world’s economic support beams, posted its first all-around annual loss since 2015. The glut of supply from OPEC, coupled with the aforementioned economic fears, has been driving prices down to the point that OPEC is expected to begin drastically slashing its own supplies to keep prices up.
Both U.S. and Brent crude futures are down by over a third this financial quarter, which is the steepest decline either future has seen since 2014. Looking at the year overall, U.S. futures are down by 25%, and Brent futures are down nearly 20%. Oil prices managed to pick up a couple of points on Monday after President Trump announced progress on a U.S.-China trade deal, but the gains were quickly lost due to fears of China’s slowing factory sector.
According to a poll by Reuters published on Monday, analysts are less-than-enthusiastic about oil for the near future. Based on the survey of 32 economists and analysts, Brent futures are forecasting a price of $69.13 a barrel next year, a notable drop compared to 2018’s high of $71.76. Until OPEC’s planned cuts of 1.2 million bpd go into effect (projected at mid-January to early February) oil prices will likely continue to stagnate.