Oil Price Outlook

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Oil Price Outlook

Positive drivers on the price of crude oil through 2020 include heightened tension in the Middle East, a strong US Dollar, and OPEC supply cuts. Negative drivers on the price of crude oil through 2020 include increasing non-OPEC production, increasing US shale oil production, and slowing global oil demand.

Positive Drivers

Political Events

Strong US Dollar

  • Global crude oil prices are tied directly to the US dollar, which has been strong since 2014.
  • The US dollar is expected to remain strong through 2020 and 2021.


  • OPEC has limited the amount of oil output from their member countries in 2019, in order to stabilize prices and offset an increasing supply from non-OPEC countries.
  • OPEC estimated that demand for its oil in 2020 would be 1.12 million bpd less than in 2019.

Negative Drivers

Non-OPEC Production

  • Crude oil production from non-OPEC countries, like Brazil, Canada, Norway and Guyana, is increasing.
  • Non-OPEC production is set to add 2.3 million barrels a day to supply in 2020. This is more than the anticipated increase in demand and therefore is exerting negative pressure on global oil prices.

Increasing US Shale Oil Production

  • The US has slowly been increasing the amount of shale oil they produce since 2015.
  • In September 2019, the US exported more oil than it imported for the first time since 1948.

Slowing Oil Demand

  • Demand for oil has not risen as much as expected since 2018, due to certain countries decreasing their dependency on oil due to climate change.
  • In 2018, demand only grew by 0.5%, and by 1.46% in 2019. Some experts predict that oil demand will peak as early as 2025.