On Wednesday, January 7, the price of Brent fell below $50 for the first time since May 2009.
According to experts, the price of the U.S. benchmark WTI crude oil will drop to $35 a barrel. This will force either Saudi Arabia or other non-OPEC countries to cut oil output, the note reads.
According to Bank of America Merrill Lynch, the oil market will test the bottom only if OPEC countries reduce their oil supplies and the cartel members curtail oil production to let the global demand pick up. However, none of these requirements have been satisfied yet.
According to Walter Zimmerman from U.S. company United-ICAP, who predicted a fall in oil prices in 2014, any further decline in oil quotes will be an extremely emotional decision unrelated to supply and demand. He said that if prices slide below $39 per barrel, they will then hit the level of $30 a barrel, according to Bloomberg.
The Philippines will be the one to benefit most from the situation, as noted by the publication, with reference to a review by Oxford Economics Ltd. The country's economy will grow by 7.6% in two years with oil prices at $40 a barrel, while, according to British economists, Russia's GDP will shrink by 2.5% in the next two years if oil prices remain low.
