Oil extends gain on supply cut, weak economy strains outlook

Galtero Lara
Junio 13, 2019

Algeria has floated an idea of increasing an oil supply cut by OPEC and its allies in the second half of 2019 as demand falters, OPEC sources said, although rolling over current output curbs is still the most likely scenario. There is a debate obviously within the country about the exact volume that Russian Federation should be producing in the second half."The coalition has yet to decide when it will meet to address the supply accord".

"Over the past week or so our economists have revised down their GDP growth outlook for the U.S., China, India and Brazil", Barclays bank said on Monday in a note about the economy and its impact on oil demand.

The organization will be "unyielding" in its efforts to reduce oil inventories back to normal levels and revive investment in the industry, taking an approach that is "agile" and "flexible", Barkindo said in remarks delivered via video link at a conference hosted by RBC Capital Markets in NY.

Falih, in Moscow for talks with his Russian counterpart Alexander Novak, said there was clearly disagreement in Russia about whether to prolong the pact at a policy meeting in Vienna in coming weeks, according to Reuters.

The U.S. Energy Information Administration cut its 2019 world oil demand growth forecast by 160,000 barrels per day, to 1.22 million Bpd (Mmbpd).

At 485.5 million barrels, USA commercial stocks were at their highest since July 2017 and about 8% above the five-year average for this time of year, the EIA said. The cuts have helped winnow global stockpiles and pushed prices higher, along with the removal of supplies from Iran and Venezuela.

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Brent crude futures, the global benchmark for oil prices, fell $1.36, or 2.2%, to $60.93 a barrel by 11 a.m. EDT (1500 GMT).

The G-20 ministerial meeting on energy is scheduled for June 15-16 in Nagano, Japan, while the final leaders summit will take place on June 28-29 in Osaka.

President Vladimir Putin has shown he is reluctant to walk away from the agreement, which also ensures his political partnership with Saudi Arabia as economic ties tighten.

The minister also said Saudi Aramco had extended its offer to join Russian gas producer Novatek's Arctic LNG 2 project and that he hoped Novatek would agree to it, TASS news agency reported.

State oil giant Saudi Aramco is looking at "multiple" projects in Russia, Al-Falih told Tass. Saudi Arabia also may be interested in taking a stake in Russian petrochemical producer Sibur Holding, he said.

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