Novak: Global Oil Market Affected by Geopolitics, Hard to Forecast

The pressure of geopolitical factors in the global oil market is becoming increasingly strong, which makes forecasting more difficult, Russia’s Energy Minister Alexander Novak told a session of the Russian Energy Week on Wednesday, according to TASS

The minister said the situation on the market is “almost stable”.

“Despite the fact that we witness a certain stable price movement around $60 (per barrel), we still witness no stability on the market. We feel that ‘black swans’ are floating around,” he said.

“As of today ‘black swans’ are playing a fundamental role, and we should think how to offset the influence of those factors,” Novak added.

A black swan event is often described as an unforeseen event that may have damaging consequences.

The impact of trade wars between countries on oil consumption has risen over the past two years, the minister said. “That surely offers little room for optimism about the current state and forecasts,” Novak noted.

Demand for oil is expected to rise by 1.4 million barrels per day in 2020 compared with 2019, Novak told The Energy Policy magazine on Wednesday. This year the demand was under the pressure of trade wars, with daily increase only equalling 1 million barrels, he pointed out, adding that the growth in demand will recover next year.

Oil prices slipped in the previous session following weak U.S. manufacturing activity data that put downward pressure on crude’s demand outlook. On Wednesday, Brent crude futures is currently trading 0.17% lower at $58.69 a barrel, while is up 0.21% at $53.73 a barrel.