Deutsche Bank experts believe that over the next few years we may well see both higher oil oversupply and global economic slowdown as well as a much stronger dollar and higher oil prices.
For those of you who don’t know, on January 20th, oil prices set new 13-year lows around $27 per barrel, Market Leader reminds. However, this seem to be the bottom since Brent oil futures rebounded from it and started rallying. Over the past 34 trading sessions, the price has already increased by 46%.
The rally took place amid a weaker dollar as well as the never-ending talks initiated by Russia and some OPEC members and aimed at capping oil production to avoid even higher oversupply and lower oil prices in the near future, Masterforex-V Academy reports.
At the same time, Deutsche Bank experts predict that over the next couple of years, the oil oversupply is more likely to decrease, which is definitely going to make oil prices stronger to some extend depending on other factors. Some of them assume that the international market of crude oil may even see a deficit in the second part of 2017. At the same time, this year’s oversupply is going to be lower than last year, they say. In particular, they predict a surplus equal to 600 000 barrels a day versus last year’s 1150 000 barrels a day. The same forecast for 2017 is 160 000 barrels a day (or even a deficit in late 2017 or some time later).
Basically, that’s the key reason why they expect oil prices to recover all the way up to 50 or even 55 per barrel in the second half of 2016. Well, this is a brave prediction, which is subject to risks. The thing is that the demand growth is slowing down amid stable overproduction.
In he meantime, other experts warn the international community about the fact that a storm is coming to the global economy. It is mainly caused by narrow-sighted policies pursued by governments and central banks around the globe implementing certain types of money-and-credit policies. It may well be that more central banks (especially those of oil-exporting nations) will introduce negative interest rates to back economic growth and hinder recession and other challenges resulting from lower oil prices.
