The Organization of the Petroleum Exporting Countries in its June Monthly Oil Market Report (MOMR) said spot crude oil prices increased in May after hitting low levels in April, thanks to significant improvement in physical market fundamentals. The OPEC Reference Basket (ORB) value gained $7.51/barrel (42.5%) from a month earlier to $25.17/barrel.
Crude oil futures prices also gained traction last month, propelled by an optimistic outlook on global oil market fundamentals and expectations for a further recovery in oil consumption and easing global oversupply. ICE Brent rose by $5.78 (21.7%) month-on-month to an average of $32.41/barrel, while NYMEX WTI surged $11.83 (70.8%) month-on-month to $28.53/barrel.
OPEC’s forecast on the world’s economic growth is unchanged. The global economy is expected to contract by 3.4% year-on-year in 2020, after a 2.9% growth in 2019. The US GDP is estimated to contract by 5.2% this year, after expanding by 2.3% last year. Eurozone’s economy is forecast to contract by 8.0% in 2020, compared to a 1.2% expansion in 2019.
In Asia, Japan’s 2020 GDP is forecast to fall by 5.1%, compared to a 0.7% increase last year. China’s economy is expected to grow by 1.3% in 2020, decelerating from a 6.1% expansion in 2019. India’s GDP is forecast to decline by 0.8% in 2020, a significant slowdown from 4.9% rate in 2019.
Brazil’s economy is expected to shrink by 6.0% this year, after increasing by 1.1% in 2019. Russia’s GDP will likely contract by 4.5% this year, compared to a 1.3% growth in 2019, dragged by the COVID19 and the fall in oil prices.
