OPEC cuts forecast for global crude demand in 2019

Galtero Lara
Marcha 15, 2019

In the Middle East, the United States aims to cut Iran's crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid USA sanctions, two sources familiar with the matter told Reuters.

In April past year, the Abu Dhabi National Oil Company (ADNOC) said that it was establishing a new trading unit to "introduce and manage non-speculative trading to further maximize value from every barrel of crude oil and refined product that is produced and marketed by the company".

Oil futures rallied about 2 percent on Wednesday as USA crude inventories unexpectedly fell and an official forecast of crude oil supply growth from the world's top producer was revised lower.

OPEC may extend production cuts as demand is expected to go down this year.

Continued supply reductions would further support oil prices, which are up about 25 per cent this year at $68 a barrel. Still, oil prices could also come under downward pressure from an economic slowdown.

The up move in prices are also propped up by declining USA crude oil supplies, as per yesterday's weekly report by the DoE.

Crude oil imports have decreased in recent years as U.S. crude oil production has increased.

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Overall Opec output fell by 221,000 bpd month-on-month to 30.55 million bpd. On Sunday, Saudi oil minister Khalid Al-Falih said it would be too early to change OPEC+ output policy at the group's meeting in April.

Iraq exported on average around 3.6 million bpd in January-February, and 3.7 million in December. "We do not want severe volatility in prices because this affects producers and consumers", he added.

Oil prices were steady on Friday, supported as production cuts led by OPEC and US sanctions against Venezuela and Iran likely created a slight deficit in global supply in the first quarter of 2019.

International Brent crude oil futures marked a 2019-peak of $67.80 per barrel in Asian morning hours. Brent touched $67.76 a barrel on Wednesday, its highest since November 16.

By 15:07 GMT, the crude Brent for the world benchmark was $ 67.22 a barrel, an increase of 55 cents or 0.82 percent over the previous closing.

At the moment the barrel of WTI is up 0.50% at $58.53 and a breakout of $59.63 (50% Fibo of the October-December drop) would open the door for $62.00 (200-day SMA) and then $63.74 (78.6% Fibo of the October-December drop).

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