NEW YORK (Reuters) - Analysts have lowered their oil price forecast to its lowest level in more than 16 months, citing a slump in global demand amid a looming economic slowdown and uncertainty in US-China trade.
51 economists and analysts surveyed predicted that the average price of Brent crude will reach $ 65.02 per barrel in 2019, down about 4% from the previous month's forecast of $ 67.47, compared with an average of $ 65.08 for global benchmark crude since the beginning of this year.
This is the lowest expected average price for Brent in 2019 since March 2018.
The 2019 WTI futures contract fell to its lowest level since January 2018, at $ 57.9 a barrel, down from last month's forecast of $ 59.29. West Texas averaged $ 57.13 this year.
"The ongoing trade disputes between the United States and China and the risk of an escalating economic slowdown will be a pivotal effect on prices for the remainder of this year and in 2020," said ANZ analyst Sony Kumari. "A prolonged trade dispute could deepen the economic slowdown and affect demand growth."
The trade dispute between the world's two largest economies has been a major factor behind oil prices falling about 20 percent from the 2019 peak in April, with Beijing announcing tariffs on US crude imports last week.
The decline in price has eased the impact of OPEC-led production cuts, and analysts therefore do not expect the cartel to extend the restrictions beyond 2020. "The producers' blocs usually become less stable when Prices are under pressure and members struggle for market share. "OPEC will not be distracted from this rule."
Meanwhile, global demand is expected to grow between 0.9 and 1.3 million bpd in 2019, compared with July's forecast of 0.8 to 1.4 million bpd.
The US Energy Information Administration, the International Energy Agency and OPEC in August lowered their forecast for demand growth in 2019.