Cohen says Barclays expects a flat performance from oil in 2019 in spite of the geopolitical environment because US shale production is likely to ramp up, replacing some American demand in the global market with increased supply.
"Right now, from a crude oil perspective, the market is well supplied".
One might expect the market to be nervous ahead of the impending United States sanctions on Iran, but the oil price dipped this week.
The Permian region, which is located in western Texas and eastern New Mexico, accounts for about 63% of total Texas crude oil production and 95% of total New Mexico crude oil production.
Structurally oil prices remain bearish as the Brent curve moves deeper into contango (Spot price lower than forward price).
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Investors will look to official government data on USA inventories due on Wednesday.
China's manufacturing sector in October expanded at its weakest pace in over two years, hurt by slowing domestic and external demand, in a sign of deepening cracks in the economy from the trade war with the United States. "What this means in the near-term is that the USA may double production, double export capacity and introduce new market innovations", Fannon said.
According to the data released by the U.S. Energy Information Administration, crude oil inventories increased by 3.22 million barrels in the week ended October 26, less than forecasts for an over 4 million barrels increase. For example, should the world lose Iran's 2.7 million barrels per day, OPEC may not be able to fill the gap. Russian Energy Minister Alexander Novak suggested in late October the country may keep its output at the current level above the Soviet-era record or boost production further.
Adequate oil supply and an uncertain global economic outlook also dampened sentiment.
In addition, the U.S. is increasing its oil production rates and doing its bit to help lower the oil price.
Financial markets found some support on Tuesday from reports that U.S. President Donald Trump thinks "a great deal" with China is possible on trade.
"We actually believe that the White House is going to be quite stringent in granting significant reduction exemptions and that around 1.6 million barrels of Iranian exports will be off the market by Q1 2019, and that will lead to tighter supply and demand dynamics", according to Croft.