The current situation in the black gold market does not inspire optimism to experts and investors. Analysts of one of the largest banks BNP Paribas revised their oil forecast.

The black gold market is losing its previously won position against the background of continuing risks of an escalation of the trade conflict between the US and China. In addition, pressure on the cost of oil is exerted by data from the US Department of Energy. The report of the agency reported an increase in weekly reserves of raw materials in the country by 1.6 million barrels, to 440.5 million barrels, or 0.4%. Note that over the past week, the volume of oil production in the US has not changed, remaining at 12.3 million barrels per day, which is considered a very high indicator.

According to some analysts, the pressure on oil prices will remain due to the growth of supply with stagnating demand. The situation is unlikely to change in the near future, experts believe. Experts of BNP Paribas Bank believe that market players should abandon long positions in oil.

At the moment, the market is dominated by negative sentiment. Market participants are in tension, not knowing how serious the recession in the global economy will be and how much demand for black gold will fall. BNP Paribas believes that in this situation, oil becomes sensitive to any changes.

According to analysts of the Bank, an important factor for the oil market will be the extension of the OPEC+ agreement after the first quarter of 2020. However, a serious limitation of production should not be expected. The experts of BNP Paribas predict a rise in production among independent oil producers. According to experts, by the end of this year, the growth rate of reserves will be 128 thousand barrels per day, and next year, they will increase to 499 thousand barrels per day.

Due to the unstable situation in the black gold market, the bank lowered the forecast for Brent crude oil. By the end of this year, its price will fall to $62 instead of the previous $71 per barrel. As for the cost of the reference grade by the end of 2020, it will decrease to $68 from the previous $82 per barrel calculated earlier. By the end of this year, WTI light oil will fall to $55. Recall that the previous forecast assumed the price of $63 per barrel. Next year, they will give $51 for a Texas variety instead of $64 per barrel, according to BNP Paribas.