Suggestions that cheap oil will cure itself by spurring demand may fail to play out as consumers look to save rather than spend.
And a likely deal to lift sanctions on Iran and allow its huge oil reserves to return to markets, has led many analysts to trim their oil price forecasts to reflect deepening oversupply.
BMI Research, a subsidiary of Fitch Ratings, said on Tuesday that a strong U.S. dollar, China’s weakening economy and the prospect of rising Iranian oil exports would keep downward pressure on prices in the coming months.
“A retest of Brent crude’s 2015 low around $45 per barrel looks inevitable given current ample market supply and intensifying bearish market sentiment toward prices,” the firm said in a note to clients.
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