According to analysts at Bloomberg, a potential decline in oil prices will give Europe and America a chance for economic growth. A dubious statement! Nevertheless, some economists are confident that a recession will bypass countries with developed economies, primarily the US and the European Union. In this scenario, they will smoothly move on to a policy of lowering interest rates if global oil prices fall to $60 per barrel.

Such a scenario is realistic in light of the latest trends in the global oil market. Last Tuesday, September 10, Brent crude oil futures slipped below $70 per barrel for the first time since 2021. In this context, experts and market participants foresee a further bearish trend.

Global regulators are not sitting idle either. Last Thursday, September 12, the European Central Bank announced another rate cut by 25 basis points. As for the Federal Reserve, the markets expect it to ease monetary policy at the nearest policy meeting on September 18. Updated oil forecasts could clear up the stance of regulators, experts believe.

In the current situation, analysts at JPMorgan and Citigroup warn investors about a protracted downtrend in oil prices until 2025. Experts anticipate that modest global economic growth will be accompanied by an increase in hydrocarbon supply. Earlier, Trafigura also predicted a drop in oil prices to $60 per barrel. According to analysts, current levels of crude oil were last seen 20 years ago when China boosted its oil demand.

At present, developed economies may not respond to the stimulus for growth, but sooner or later, they will gain momentum. Households will feel the relief of easing inflationary pressure. In turn, this will set the stage for an increase in real income and higher demand, experts say.

Earlier, market participants noted that for the first time in a long while, OPEC and its allies failed to determine a strategy due to the decline in oil prices. Shortly after announcing an increase in production quotas, the move was postponed by two months. The major oil exporters have not unveiled their future strategy yet. The main problem for the cartel is robust oil production outside OPEC, which threatens to reduce its share in the petroleum market.