Sudden surge in oil’s price has become a major concern worldwide. The price has surged since the turn of 2019, as OPEC and its allies step towards cutting down outputs voluntarily. Moreover, U.S. oil sanctions on Iran and Venezuela are equally responsible for skyrocketing oil’s price. However, both sluggish global economic growth and rising U.S. output would end the current rallying in oil prices.
An economist predicts that the subsequent rise in the S&P Energy Index will fall in the coming months. This will happen once the sluggish global economic growth weighs on oil prices and demand.
The U.S Withdrew Sanction on Iranian Crude Oil Exports
Caroline Bain, an economist and her team predicted that the oil price would fall drastically in the coming days. They further analyzed that once the oil supply fears begin to fade, the prices would begin to drop..
Economic research consultancy has currently revised its forecast till 2019-end. It reveals that the price of Brent would be elevated from US$50 to US$60 per barrel. The consultancy has found the U.S president administration’s sanction withdrawal on Iran’s oil exports as a primary reason behind surge pricing. A note – “Calling time on the oil price rally” by Bain states a few points related to price dropping.
According to an international economist, the crude oil prices have elevated nearly 40% since the last December. Although, the economist further explained that global fears due to the tight supply conditions looked overdone in such case.
However, other international economists foresee that the escalation of tensions between Iran and the U.S may drive up oil prices.