Why a global oil oversupply has economic repercussions for the world

Stephen Grootes speaks to Peter Armitage, CEO of Anchor Capital, who shares some insight into why there is currently an oversupply of oil in global markets.

Listen to the interview in the audio player below.

The global oil market is increasingly showing signs of oversupply, with a combination of strong production growth and more restrained demand exerting downward pressure on prices and inventories worldwide.

Brent crude is forecast to average around $61 per barrel, while U.S. crude is seen near $58, both below earlier estimates.

Oil benchmarks such as WTI and Brent have seen notable price declines amid oversupply expectations.

Speaking to Stephen Grootes on The Money Show,  Peter Armitage, CEO of Anchor Capital say factors behind the surplus include higher production and slower global growth, which ultimately impacts oil prices, inflation, and the broader economy.

"It's hard to see global demand for oil being much higher in a few years time. And global supply likewise, Ironically this could land up with Venezuela producing a lot more in a few years time, if Trump has his way."

- Peter Armitage, CEO - Anchor Capital

"Most people, in their forecast pages are looking at a fairly benign oil price for some time. But at $60, people still make a lot of money. That's why there's an equilibrium in the price."

- Peter Armitage, CEO - Anchor Capital

Scroll to the top of the article to listen to the full interview.