Oil Wavers as OPEC Pushes Supply Cut Need, Demand Fears Weigh

Darnell Taylor
March 15, 2019

In its monthly report released on Thursday, the Organization of the Petroleum Exporting Countries cut the forecast for demand for its crude this year and predicted strong growth in non-OPEC supply.

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Oil prices have risen since the beginning of this year thanks to supply cuts led by OPEC.

Crude oil production in the country also fell by 106,000 barrels per day (bpd) to around 12 million bpd, the data showed.

The report said USA crude oil production averaged 11.9 million barrels per day in February, lower than the January average.

USA crude oil inventories shrank unexpectedly again last week, alongside another drawdown in product inventories.

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Even so, with the demand for Opec crude forecast at 30.46 million bpd, the report indicates that the market would still face a small 2019 surplus if OPEC kept pumping at February›s rate, as rivals such as the United States boost output.

For 2020, the government said it expected USA crude oil demand to rise by 220,000 bpd to 21.03 million bpd, unchanged from previous forecasts.

"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.

After cutting its output by 500,000 bpd in March from the month before, Saudi Arabia reported earlier this week on plans to limit its crude supply to below 7 million bpd.

Thamer Ghadhban told reporters that an Opec meeting in Vienna in April would assess member states› compliance with agreed production cuts and whether to extend the curbs until the end of the year. "We do not want severe volatility in prices because this affects producers and consumers", he added. US West Texas Intermediate rough futures were $ 57.89 per barrel, an increase of $ 1.02, or 1.79 percent, compared to the previous settlement price.

International Brent crude oil futures were at $66.93 a barrel at 0039 GMT, up 26 cents, or 0.4 percent, from their last close.

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