Mubasher: Global oil prices are expected to decline during the first six months of 2020, according to a report released on Saturday by the National Bank of Kuwait (NBK).

The new year started with the US and Iran on the brink of war, pushing up oil prices to jump over 3%. However, the two countries pulled back and oil took a downward direction.

Brent crude declined by 1.7% to settle at $64.9 per barrel (pb) on Friday 17 January, compared to $69 pb a ten days earlier, while WTI settled at $58.5 pb.

The signing of the first phase of a trade deal between the US and China boosted sentiment in markets. Under the recent agreement, the US will ease economic sanctions against China, while Beijing will increase its purchases of American farm products and other goods.

Moreover, non-OPEC supply is expected to increase by 2.1 million barrels per day which would be almost twice the rate of demand growth.

“Downward pressure on oil prices is expected to be greatest during the first half of 2020, with supply in excess of demand and stocks rising. Geopolitical risk, though de-emphasised, remains a constant factor,” NBK’s report said.