American investment banking and financial services firm Morgan Stanley lowered its crude oil price forecast for 2019 due to weak global economic growth expectations and rising oil supply worldwide, the company said Wednesday.
International benchmark Brent crude is now estimated to average $61 per barrel this year; down $8 a barrel from its previous estimate of $69 per barrel.
American benchmark West Texas Intermediate (WTI) is forecast to average $54 a barrel; down $6 per barrel from its earlier forecast of $60 a barrel.
The firm said the downward price revision is a result of “weakening economic growth expectations” and increasing oil supply in the world, especially from the U.S.
The U.S.' crude oil production sustained at its record high level of around 11.7 million barrels per day for the week ending Jan. 4, according to the country's Energy Information Administration data released on Wednesday.
Global economic growth is expected to slowdown in 2019, compared to last year, which is set to keep downward pressure on global oil demand and on crude prices.
The World Bank was the latest organization to lower global growth forecast for this year. The bank said Wednesday that global economic growth would slow to 2.9 percent this year, from 3 percent in 2018.
"International trade and manufacturing activity have softened, trade tensions remain elevated, and some large emerging markets have experienced substantial financial market pressures," the World Bank said in its Global Economic Prospects report.
By Ovunc Kutlu