$10 Oil – How Far Could Oil Prices Fall If We See A 2009 Style Crash?

Forecasters can’t revise down their projections for oil demand fast enough

While predictions about volatile oil prices abound, one theme keeps popping up: geopolitical risk premium. First it was theories about a closure at the Strait of Hormuz. Then it was fears of an all-out war between Iran and the United States or Iran and Saudi Arabia. All those are merely possibilities, but the reality suggests that a whole different kind of extreme is far more likely: crushingly low oil prices.

In amongst the screams of geopolitical risk premium are far scarier whispers of words such as demand destructiontrade disputes, and economic climate deterioration. And those words describe the current reality in the market, and as such, suggest a similar future reality—a reality where demand destruction continues to push prices down, down, down. Is $10 oil really possible?

Throughout 2019, it seems like the forecasters can’t revise down their projections for oil demand fast enough. The International Energy Agency has continued to revise downward its oil demand growth projections for 2019 and beyond.

https://www.oilprice.com

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