What’s Expected for Oil & Gas Prices in 2020

Oil and gas prices at the end of 2019 saw a dramatic drop with petrol stations offering a significant decrease in petrol pricing. It is thought that this is due to demand and the economic growth of the nation as a whole.  

Climate change has become a big worry for all of us, especially with the Australian bush fires, caused by the planet becoming too hot. Air pollution has been a very big factor to climate change which is high in built up areas such as China which have lots of factories, with its main products being plastic.

You may have seen in 2019 that a lot of work has been done to eliminate single use plastics throughout the world so far, with more expected in 2020. This will mean that production of plastic will be haltered and there will mean less demand for oil and gas. By having a significant demand decrease this can mean oil and gas prices will go down which can be a godsend to those who still use petrol engine cars.

Car manufacturers are doing their part too to help with climate change by creating electric and hydrogen powered cars which will mean soon, we will no longer need to refuel our cars at all!

However, in the early months of 2020 we are expecting to see a squeeze on gas supply due to the low prices at the pump at the end of 2019. As the year goes on production is expected to expand meaning an increase in supply which could mean that prices could drop again. There has also been a de-escalation of the trade war between the U.S. and China which could mean a slower oil demand too.

How Does Supply and Demand Work?

Supply and demand levels continuously fluctuate and depending on either one will depend on the other. For example, if demand is high, supply levels take a dip until they can keep up with demand. This dip will likely mean a price increase until supply levels start to level with demand.  Sometimes, supply levels outweigh demand which is why sometimes you will see a price decrease at the pump every so often, followed by a price increase.