S&P Global Ratings has lowered its average annual price assumptions for Brent and West Texas Intermediate (WTI) crude oil for 2019 by $10 per barrel to $55 a barrel and $50 a barrel, respectively.
The forecast for 2020 was also reduced by $5 to $55 a barrel and $50 a barrel, respectively.
"Our long-term oil price deck for 2021 remains at $55 per barrel for both Brent and WTI. Our Henry Hub natural gas price assumptions are unchanged at $3 per million Btu through 2021," the consultancy noted.
Several factors have combined to abruptly reverse the direction and sentiment on oil prices which includes the ongoing trade war between the US and China; China's possible economic slowdown; US waivers to eight countries from Iranian oil import sanctions and US shale production continuing to rise.
However, S&P expects oil demand growth for the next few years is likely to remain “positive”, albeit moderating over time.
Earlier this week, Arab Petroleum Investments Corporation (APICORP) said it expects oil prices to trade between $60 and $70 per barrel range by mid-2019, despite sharp economic slowdown.
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