![]() It would also seem that there is room for meaningful upside to the IMF’s 2018 figures as they are predicated on. This would represent the fastest pace for global growth since 20 respectively. Jessop’s bottom line: “These levels would still be low enough to support consumer spending on other goods and services, while high enough to ease the financial pressures on the most vulnerable producers, including many in emerging markets. The IMF, in its most recent review of the global economic outlook, forecasts the global economy to expand by 3.5 in 2017 and 3.6 in 2018. Consumers should therefore find something to cheer too.” However, prices in this range would still be well below the $100 plus that many (not us!) had argued was the ‘new normal’ a few years ago. “This would be high enough to keep major producers afloat and justify renewed investment in the oil sector. More importantly, a price range of $45 to $60 a barrel could be just right for the world economy, Jessop argues. Related: Global Debt Hits a Record $152 Trillion. ![]() The latest OPEC-inspired rally has taken them out of this range, for now at least, but they are still relatively stable compared to the swings that had gone before.” Prices then recovered to a range of around $40-50 over the summer. “Recall that prices averaged $100 or more from 2011 until the first half of 2014, before collapsing to the high $20s earlier this year. “The first point to stress is that the truly seismic shifts in oil prices are now behind us,” he writes. In a note to clients Tuesday, Jessop writes that his team expects oil prices to slip and finish the year back around $45 a barrel before recovering and climbing toward $60 by the end of 2017. Related: What’s Ailing the Economy? Political Paralysis May Be the Biggest ProblemĪs the oil market staggers its way toward a new balance of supply and demand, Julian Jessop, chief global economist at Capital Economics, says we could end up in a “Goldilocks” scenario for the global economy. "An agreement to cut production, while increasingly likely, remains premature given the high supply uncertainty in 2017 and would prove self-defeating if it were to target sustainably higher oil prices," Goldman Sachs analysts wrote in a Tuesday note. ![]() Then prices slipped Tuesday as the International Energy Agency reported that global oil supplies increased last month and skepticism set in over whether a deal to cut output would really be reached - or how effective it would be in raising prices. Oil prices hit a one-year high on Monday after Vladimir Putin said that Russia was ready to sign on to an OPEC deal to cap production.
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