FX.co ★ Oil price forecasts depend on global GDP

According to experts, most of the forecasts for black gold prices change following the dynamics of global GDP. Experts believe that oil prices are largely determined by demand and not supply.

According to the observations of analysts at Bloomberg, there is a relationship between the forecasts of experts on the cost of WTI Texas oil and predictions about the growth of global GDP. According to analysts, the "first fiddle" in the black gold market is demand, and supply is on the sidelines.

Since October 2017, economists' expectations for global economic growth have steadily increased. Following them, WTI oil price forecasts became more positive. However, since July of last year, scenarios for the further dynamics of global GDP showed a decline, and since November 2018, the forecast for prices for WTI has worsened by about 16%. The deterioration occurred against the backdrop of the OPEC + agreement on the reduction of oil production by 1.2 million barrels per day. In early 2019, estimates of global GDP growth were revised downwards - from the previous 3.7% to 3.4%.

On Tuesday, February 12, the price of Brent crude rose 1.9% to $ 62.67 a barrel. The black gold market has received support against the background of news on the efforts of OPEC + to reduce production volumes. At the same time, the current US sanctions against Iran and Venezuela continue to limit the supply of raw materials on the world market.