Crude Up 4.1 Percent as Goldman Insists Oil Market is Robust

22 March, 2019, 12:28 | Author: Gerard Cortez
  • OPEC Maintains 2019 Global Oil Demand Growth Forecast

The West Texas Intermediate for April delivery rose 0.35 USA dollar to settle at 58.61 dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery decreased 0.32 dollar to close at 67.23 dollars a barrel on the London ICE Futures Exchange.

"With OPEC's cuts in full swing. persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported", said Jasper Lawler, head of research at futures brokerage London Capital Group.

The Organisation of the Petroleum Exporting Countries (OPEC) and some non-aligned producers including Russian Federation have been withholding oil supply since the start of the year to tighten global markets.

USA sanctions on Venezuelan petroleum products have cemented support for oil prices", said Benjamin Lu of Singapore-based brokerage Phillip Futures.

Rating agency S&P Global raised its Brent oil price assumptions back up to $60 a barrel, on the back of the production cuts by OPEC and Russian Federation.

Opec's self discipline and a surprise reduction in US crude inventories signaled tightening supplies, but concern that the US-China trade dispute won't end soon limited gains at week's end. "As it happens, 1.2 million bpd is also the size of the output cuts agreed by OPEC countries and some non-OPEC producers". They started of by saying the 1.8 million OPEC non-OPEC cut would be a full year cut.

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OPEC inventories increased by 22 million barrels in January to 2.88 billion barrels.

The 11 Opec members required to cut output achieved 105 per cent compliance in February with pledged curbs, according to a Reuters calculation, up from January. It kept its forecast for growth in global oil demand this year unchanged at 1.24 million bpd.

US production in 2019 is now expected to rise to 18.45 million barrels a day, up by 10,000 barrels from last month's forecast.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are in a position to settle the week higher after hitting new highs for the year earlier in the week. "Total demand is projected to exceed 100 million barrels per day during the second half of 2019", the report said. It earlier hit $60.03 a barrel, the highest since November 12.

Oil prices rose yesterday, driven by OPEC's current production restrictions and United States sanctions against Iran and Venezuela.

"(But), worries about growth and future demand for crude oil remain just worries at this stage", said Saxo Bank's Hansen.

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