Oil prices fell 1% on Tuesday, the last trading day of the decade, but notched the biggest annual gain in three years, supported by a thaw in the prolonged US-China trade war and ongoing supply cuts from major oil producers.
Brent gained about 23% in 2019 and WTI rose 34%, their biggest yearly gains in three years, backed by the recent breakthrough in US-China trade talks and output cuts pledged by the Organization of Petroleum Exporting Countries and its allies, Reuters reported.
Forecasters do not expect oil prices to move sharply in either direction next year.
Brent crude is expected to hover around $63 a barrel, a Reuters poll showed on Tuesday, down modestly from current levels, as OPEC production cuts offset weaker demand.
Over the past year, increased US oil output offset the supply reductions undertaken by OPEC, led by Saudi Arabia and stemming from US sanctions on Venezuela and Iran. Lackluster demand, including in developed economies, remains a primary concern headed into 2020.
“Oil prices, though largely expected to trade positive, will face headwinds from subdued global growth momentum and robust US shale output levels in the first quarter of 2020,” said Benjamin Lu, an analyst at Phillip Futures.
US crude oil production in October rose to a record of 12.66 million barrels per day from a revised 12.48 million bpd in September, the US government said in a monthly report.
The pace of growth is expected to slow in 2020.
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