Even before the impact of the global corona-virus pandemic, oil producers faced mounting challenges at the start of 2020. While average prices for 2019 were below those of 2018, the Organisation of Petroleum Exporting Countries-Plus (OPEC+) alliance -formed by Saudi Arabia and Russia in late 2016 - had ensured a stability of sorts in the market, with prices little changed at the end of the year compared with the start. Yet despite initial hopes for higher demand on the back of a more positive outlook for the global economy in 2020, analysts predicted a softening of prices for the year, citing a steady growth in production from US shale producers, coupled with initial signs of the weakening of the OPEC+ consensus leading to predictions of oversupply. "Notwithstanding more benign global macro conditions, oil prices are set for a softer year," said Ehsan Kho-man, head of Middle East and North Africa research and strategy at MUFG in a research note in early January 2020, forecasting that fresh supply cuts agreed by OPEC+ in December would not be sufficient to balance the market. "It is thus difficult to expect any sustained rise in prices and all too easy to envisage a fall."
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