JP Morgan gives its prediction for Brent crude in 2019

JP Morgan has cut its outlook for oil, predicting that Brent crude prices will average $73 a barrel in 2019 — down from the investment bank‘s previous forecast of $83.50 a barrel.

Scott Darling, head of Asia-Pacific oil and gas at JP Morgan told CNBC that the investment bank recently revised its outlook in part due to North American supply ramping up in the second half of next year. JP Morgan expects the price of Brent, the international benchmark for oil, to go toward $64 in 2020.

In Asian trade on Thursday, was trading at around $63.45 a barrel while was around $54.61 a barrel.

Demand growth will weigh, particularly after the agreed to , he said.

The market is now focused on the group‘s next meeting on December 6 for guidance. Darling said OPEC needs to cut oil production by 1.2 million barrels a day for the whole of next year to balance the oil market.

Crude oil prices have seen ups-and-downs this year, with prices spiking to multi-year highs in October due to Trump‘s decision to reimpose sanctions on Iran. Sanctions on the third-biggest producer in OPEC has put upward pressure on oil prices throughout much of the year.

Major crude oil benchmarks spiked to four-year highs one month before the sanctions went into force, but that rally has since Oil prices have plunged 30 percent since early October, dragged lower by a broader market sell-off and growing consensus that supply will outstrip demand next year.

” politics has played a part …(but) it‘s still been supply-demand driven,” said Darling.

His comments came after President on Wednesday doubled down on his defense of , thanking the kingdom for , even amid for his support for Riyadh after the killing of journalist Jamal Khashoggi.

The Trump administration has relied on Saudi Arabia to hike output — and convince other producers to pump more oil — in order to offset the inflationary impact of its hawkish Iran policy.

— CNBC‘s Tom DiChristopher contributed to this report.">(function($){$(document).ready(function(){});})(jQuery);