Oil to average US$40 per barrel in 2020

Brent crude is projected to average US$40 per barrel in 2020.

According to Fitch Solutions, the research arm of ratings agency Fitch, Brent crude prices will decline from an average of US$64.2 per barrel in 2019 to US$40 per barrel in 2020.

This means that the government will lose about US$20 per barrel from the US$63 per barrel it forecast for this year.

Ghana bagged about US$4.4 billion from oil exports in 2019.

This was against US$4.5 billion in 2018.

The government had targeted more than US$5 billion in oil revenue but the COVID-19 pandemic, which has seen oil prices fall to a low of USS20, the lowest in 20 years, will not permit that realisation.

The rising crude price has now led to a rise in the price of fuel at the pump by about 3% beginning from 15 June 2020.

The last review saw prices of petroleum products go up by about 8%.

Crude oil prices jumped to a two-month high on Monday, reflecting output cuts with investors betting that looser lockdowns will boost demand for fuel.

West Texas Intermediate, the US benchmark, was trading 7.1% higher at US$31.80.

Analysts say oil supply cuts are paying off.

Naeem Aslam, chief market analyst at Avatrade, said it was turning out to be a "remarkable day" for both WTI and Brent.

"The global economy is reopening and the oil glut has eased off," he said.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies reached a deal to cut oil production by 9.7 million barrels per day in May and June to shore up the price of the commodity.

Prices tanked earlier this year as the coronavirus pandemic weighed on economic activity and Saudi Arabia and Russia waged a bitter oil-price war.