Macroeconomic conditions will also play a role. Analysts see economic growth remaining fairly robust in early 2019, supporting an increase in fuel demand. However, that growth is expected to slow heading into 2020.
"As we look ahead, we expect oil demand growth to remain firm in the next couple of quarters as our economists forecast a turnaround in manufacturing PMI and industrial production," said Abhishek Deshpande, head of oil market research and strategy at J.P. Morgan Chase.
"However, this recovery is unlikely to last as structurally demand should slow in 2019-20 based on our economists' projection for GDP," Deshpande wrote in J.P. Morgan's latest quarterly outlook.
The biggest economic risk is that tit-for-tat tariffs between the U.S. and China devolve into a full-blown trade war. The world's two biggest economies could impose tariffs on all goods shipped between the two behemoths if they don't clinch a final deal in the coming months.
An economic slowdown in China could have significant impacts on energy markets because Asia is the engine of oil consumption, while demand is fairly anemic in developed Western countries. While Asia has delivered in recent years, the oil market's reliance on the region for growth nevertheless creates downside risk for crude prices, according to RBC Capital Markets.
In fact, the biggest threat to the oil market in 2019 emanates from China, according to RBC analysts. While China has been sopping up lots of crude, it has also been churning out huge volumes of refined products like gasoline. The firm warns that a glut of Chinese fuel could create contagion throughout the global oil market.
According to RBC, "continuing down the path of the current elevated refinery run rate would intensify gasoline balances that are already downward spiraling and potentially kick off a domino effect in which a gasoline glut created in the East ultimately reverberates westward and results in an oil market led lower by an oversupply of refined product."