Novak’s Comments Suggest a Difficult Time for Crude Oil in 2020 - Forex News by FX Leaders

Novak’s Comments Suggest a Difficult Time for Crude Oil in 2020

Posted Friday, December 27, 2019 by
Skerdian Meta • 1 min read

Crude Oil has had an interesting year, having started the year below $50, climbing around $20 to $66 in Q1, after OPEC+ decided to place quotas at the end of last year. It slipped lower to $50 in Q2, then we saw a surge in September after the attack on the Saudi Oil refineries.

But, that didn’t last long and WTI Crude Oil turned lower again, as the global economy continued to weaken and the demand for Oil declined. Although, OPEC decided to intervene again, cutting production quotas by an additional 50k barrels/day, which has kept Oil prices bullish since then.

Comments by Russian energy minister, Alexander Novak:

  • Russia will need to raise oil output at some point
  • OPEC+ deal is positive for the market but it can’t last forever
  • Next year we will discuss raising oil output

Russia didn’t like the new quotas, as we heard Novak say that it would have been better for OPEC+ to wait until next year, but OPEC decided to go ahead at the end of November. Now Russia is saying that the output cuts can’t last forever.

The oil market is going to be a really interesting one to watch next year. The whole deal with the latest OPEC+ pact is that Saudi Arabia has said that they will deliver extra cuts but that will be contingent on other members complying with their own output quotas.
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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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