U.S. | Oil Prices Outlook. June 2019

Summary

OPEC+ will most likely extend the output deal through the rest of the year. Weaker economic growth to lead to slower demand for oil. Escalation of tensions between U.S. and Iran, as well as trade negotiations between China and the U.S. are the main sources of uncertainty.

Key points

• Key points:
• U.S oil production will expand further while substantial transportation capacity is being added
• Our prospects for lower prices in 2H19 and 2020 assume slower economic growth in a well-supplied market
• We maintain our view of convergence to long-term equilibrium of around $60/b
• Elevated uncertainty around long-term equilibrium: CAPEX, protectionism, transportation infrastructure, alternative energy sources, EM convergence, EVs, climate change, efficiency and technology

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