WTI oil eyes third biggest yearly gain of the decade

• WTI oil is up nearly 36% on a year-to-date basis. 
• The oil market is forecasted to swing into a deficit next year.

West Texas Intermediate (WTI) oil is currently trading at $61.68 per barrel, representing a 35.86% gain on the opening price of $45.03 seen on Jan. 1. 

The black gold is on track to register its third-biggest annual gain since 2009, having rallied by 86.64% in 2009 and 45.40% in 2016.

Prices jumped by more than 30 percent in the first quarter and rose as high as $66.58 in the second quarter before falling back to lows near $50.50 in the July to September period. 

The bounce seen in the current quarter could be associated with the fading US-China trade tensions and decision by OPEC and Russia to deepen production cuts. 

Oil market to swing into deficit

JP Morgan analysts are estimating that the market will experience a supply deficit of 200,000 barrels per day in 2020, courtesy of OPEC’s bigger production cuts.

The investment bank recently raised its Brent oil forecast for 2020 to $64.50 per barrel from the earlier projection of $59 barrel. WTI prices are seen averaging $60 per barrel in 2020. 

Goldman Sachs expects WTI to average around $58.50 per barrel in 2020 and expects the gap between supply and demand next year to tighten by 300,000 more barrels per day.