The rising production of United States crude oil had weighed on the prices of oil all through 2019 and combined with the growth in demand being weak in the previous year and the booming output of American oil which has resulted in the lower prices of oil on an average in the year 2019 in comparison to 2018 as per the Energy Information Administration in the United States on this Tuesday.
In the last year, the prices of oil had been trading in a narrow range as the production in the United States had grown and the demand growth had weakened to offset the factors which were bullish like the ongoing production cuts of OPEC and the flare-ups in geopolitics in the Middle Eastern region. The range of Brent price in the previous year had been only $20 per barrel which is the narrowest range that the benchmark has traded at since the year 2003 as per the EIA. The crude prices had raged between $47 and the level of $66 a barrel.
In spite of the narrowest range of trading in over half a decade, the year of 2019 had seen the largest spike of prices in a day after 2008. This had happened on the first day of trading after the attacks had taken place on the oil facilities in Saudi Arabia in September which had made sure that close to 5% had been cut off the supply globally for many weeks.
The hike in the prices had been short-lived as there were assurances from Saudi Arabia that they would be restoring the supplies soon and with the prospects of demand growth being very low due to the ongoing trade war.