Saturday, October 1, 2022

Oil slips on economic slowdown, as OPEC-led cuts still support

Must Read

Rainstorm Claims One, Displaces Many In Ilorin

By Stephen Olufemi Oni, Ilorin A torrential rainfall that spread from Thursday night to Friday in Ilorin, the Kwara...

Crisis In Leading Political Parties

***PDP'S Ayu Battles To Survive Bribery Allegations ***Adamu/NWC Disagree on Memo Over Campaign Council composition. By: Politics Editor Both chairmen...

Revealed: Wike Group Opts for Obi in Presidential Poll

By: Our Reporter The group being led by Rivers State Governor, Nyeson Wike in the opposition Peoples Democratic Party, PDP,...

Oil prices dipped on Monday amid concerns that an economic downturn may dent fuel consumption, but crude markets remain broadly supported by supply cuts led by producer group OPEC and U.S. sanctions against Iran and Venezuela.

Brent crude oil futures LCOc1 were at 67.03 dollars per barrel at 0231 GMT, down 13 cents, or 0.2 per cent, from their last close, but not far off the 68.14 dollars per barrel 2019-high reached last week.

U.S. West Texas Intermediate (WTI) futures CLc1 were at 58.32 dollars per barrel, down 20 cents, or 0.3 per cent, from their last settlement, and also not far off their 2019-high of 58.95 dollars from the previous week.

“The greatest downside risk to our oil price view is demand weakness on slower economic growth.

“Our base case is that global oil demand will increase by 1.3 million barrels per day (bpd) in 2019… A synchronized global slowdown in growth could push global demand growth to below 1 million bpd,” Bernstein Energy said on Monday.

U.S. manufacturing output fell for a second straight month in February, in a sign that the world’s biggest economy has been slowing down in the first quarter.

In Asia, Japan’s exports fell for a third straight month in February in a sign of growing strain from slowing global demand.

In spite this, oil prices have gained around a quarter since the start of the year amid U.S. sanctions against Iran and Venezuela, and as the Organisation of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia – known as OPEC+ – have pledged to withhold 1.2 million bpd in supply to prop up prices.

OPEC’s de-facto leader, Saudi Arabia said on Sunday that balancing oil markets was far from done as inventories were still high.

Russia also said production cuts would stay in place at least until June.

As a result, Bernstein forecast an inventory draw of 37 million barrels in the first quarter for the 36 member countries of the Organisation for Economic Co-operation and Development (OECD), which comprises most industrialized nations.

The International Energy Agency (IEA) said on Friday it expected oil markets to be in a modest deficit from the second quarter.

Key for the supply and demand balance will be the United States, where crude production has soared by around 2 million bpd over the past year, thanks largely to an onshore boom in shale formation drilling.

The number of rigs drilling for new oil production in the United States has been falling in ongoing year, and hit its lowest level since April 2018 last week, at 833 operating rigs.

However, U.S. crude oil production C-OUT-T-EIA still increased at the start of 2019, hitting a record 12.1 million barrels per day (bpd) in February, data from the Energy Information Administration (EIA) showed.

Output has since dipped back to 12 million bpd, but that still makes America the world’s biggest crude oil producer.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -
Latest News

Rainstorm Claims One, Displaces Many In Ilorin

By Stephen Olufemi Oni, Ilorin A torrential rainfall that spread from Thursday night to Friday in Ilorin, the Kwara...

Crisis In Leading Political Parties

***PDP'S Ayu Battles To Survive Bribery Allegations ***Adamu/NWC Disagree on Memo Over Campaign Council composition. By: Politics Editor Both chairmen of the ruling All...

Revealed: Wike Group Opts for Obi in Presidential Poll

By: Our Reporter The group being led by Rivers State Governor, Nyeson Wike in the opposition Peoples Democratic Party, PDP, may have opted to support...

China playing prominent role in coping with global challenges

By Carlos Aquino Under the leadership of the Communist Party of China (CPC), China has made remarkable achievements, becoming the world's second largest economy, the...

China joins hands with rest of world to advance international process of firearms control

By Zhong Sheng, People's Daily China has decided to launch its domestic procedure to ratify the UN Firearms Protocol, announced the country at the generaldebate...
- Advertisement -

More Articles Like This

- Advertisement -