The Worst Is Over For Oil Markets

Some analysts see the world dodging a recession next year, which provides some upward room for oil prices. 

Last week, the IEA warned last week that "the hefty supply cushion" building up in the first half of 2020 will cause OPEC+ problems as the group tries to balance the oil market. Part of the reason for another potential surplus is the steep drop in demand growth this year, forcing oil forecasters to make multiple downward revisions to their projections. 

"With consumption growth of just 830 thousand b/d YoY in 2019, global oil demand has easily expanded at the lowest rate since the global financial crisis 10 years ago," Bank of America Merrill Lynch said in a note. 

The slowdown was particularly concentrated in industrial sectors, which have been hit hard by the trade war. "The manufacturing downturn in 2019 has been so pronounced that we think it could aptly be labeled as the third global industrial recession in the past 10 years, following the activity drops witnessed in 2012 and 2016," the bank said. 

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