Oil prices expected to recover in 2019

Brent jumped more than 1 per cent to $71.52 on Monday following Saudi announcement

Saudi Arabia commitment to lower production output should be enough to prevent oil price from falling any further, at least for now, said Jameel Ahmad, global head of currency strategy and market research at FXTM.
"It appears that the consensus is that the price of oil would benefit from less supply heading into 2019. We do feel that the oil markets will be at risk to volatility as financial markets become more aware over the potentiality of a slowdown in the global economy next year, and that a reduction in oil supply next year would be appropriate with the risks of lower economic growth," Ahmad said.
Brent jumped more than 1 per cent to $71.52 on Monday following Saudi announcement to cut output at Adipec 2018 exhibition in Abu Dhabi.
The oil price staying around $70 for Brent and $60 in WTI and consolidating around these levels would be appropriate in the greater scheme of things, considering the ongoing external uncertainties around trade tensions and pressures in emerging markets that are seen as large risks for slowing global growth, he added.
"If there are concerns over a potential economic downturn, then it is only natural that there will be concerns over demand for commodities like oil, which is why its current valuation today can be considered as appropriate for where we currently are with the global economy," Ahmad said.
- waheedabbas@khaleejtimes.com