Oil - Q2 economic outlook
It has been a very turbulent time in global financial markets, since the start of 2016, with concerns such as slumping oil prices and a slowdown in China. In this video from April 2016, Henk Potts, Director of Global Research and Investments for Barclays, gives his views on the outlook for global financial markets.
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“We’ve seen a significant fall in oil prices over the course of the past couple of years. Go back to June 2014; we saw Brent trading around $115 a barrel. More recently, it’s been much closer to $30 a barrel.
“A number of factors have been driving down the oil price. Short term, we know it’s been impacted by lower levels of economic activity than was anticipated. Looking at the inventory levels in the United States: - they have really been rising quite dramatically, back to their highest level in eight decades now.
“Iranian oil is about to come onto the market; those sanctions are being lifted. That’s another million barrels of oil set to hit the oversupplied market. There’s a lack of consensus among OPEC members to cut production as well.
“Also, remember those long-term structural changes that have been taking place -- a pickup in production levels, some of the more fragile OPEC members. Shale extraction in the United States has really boosted supply there, and, of course, reduced demand growth coming through from China.
“All that together tells us we’re going to see lower oil prices much longer. We expect crude to average $37 a barrel during the course of this year.”
Henk Potts, Director of Global Research and Investments, Barclays.
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