Oil climbs 1pc on OPEC output cut, but U.S. production robust

Virginia Carson
January 22, 2019

Last week, the US Energy Department forecast a slow recovery for Brent prices during 2019 - averaging US$61 a barrel for the year and nearing US$63 by the fourth quarter.

The expert believes that bearish trends include a rising USA crude oil production, which reached 11.5 million b/d in November. "If the producers deliver on their promises, the market could return to balance in the first half of 2019".

Most of the reduction came from Saudi Arabia (470,000 bpd), but there were also substantial cuts from Iran (160,000 bpd) and Libya (170,000 bpd) as a result of US sanctions and domestic unrest respectively.

Oil prices rallied about three per cent on Friday, boosted after OPEC detailed specifics on its production-cut activity to reduce world supply, and on signals of progress in resolving the U.S. As of writing this article, Spot Crude oil WTIUSD is trading at $52.74 per barrel up by 1.07% on the day.

Manchester United vs. Brighton
Solskjaer was happy with how his team played overall and with the spirit they displayed in seeing out the win. We have had some tough years at the club but it's a challenge for us to get to where we as a club should be'.

OPEC said its output fell 751,000 barrels per day in December, suggesting it was on its way to fulfilling terms of a pact to cut production between those nations and other producers, including Russian Federation.

Earlier a source in OPEC told TASS that the publication of data on production cut quotas will make it possible to overcome the market skepticism around the December decision.

But the cut was mostly due to the Saudis, with data indicating several OPEC members increased production last month. News about China's stimulus measures might ease some of the concerns. Longs rose 1.8 percent, while shorts fell 10 percent.

But U.S. stocks pared some of those gains after a Treasury spokesperson denied the report, adding more uncertainty to the dispute which has kept global markets on edge for months.

Buzzfeed's Trump lawyer report not accurate - Mueller's office
Cohen fell afoul of the special counsel for lying to Congress at least three times about the timeline and extent of these plans. Cohen, Trump's former attorney, has already pleaded guilty in federal court to lying to Congress about the tower negotiations.

The producer group agreed in December to return to output cuts, of 1.2 million barrels per day, to support oil prices and fight a glut at a time of rising supply, especially from the United States.

"Even if this goal is too ambitious the U.S. will go on applying strong pressures on buyers of Iranian oil in order for them to stop importing crude from Tehran", said Perrin. Meantime, China and India declared that their preference is to continue buying Iranian crude even after the expiry of the waivers. The countries issued a statement that said the May 2018 reelection of Maduro lacks legitimacy, and they condemned the breakdown of the constitutional order and the rule of law in Venezuela. This year, America's crude oil production is expected to average 12.1 million bpd in 2019, while crude production in 2020 is seen averaging 12.9 million bpd, with most of the growth coming from the Permian.

OPEC along with other producers including Russian Federation agreed past year to output cuts effective January 1 to avert a glut. "The impact of higher oil prices in 2018 is fading, which will help offset lower economic growth".

He pointed out that the United States sanctions already led to a strong fall in Iranian oil production and exports in 2018. Refineries operated at 94.6 percent of their operable capacity. Switching to low-sulfur crudes is one option for refiners globally to meet the new limits, but most Russian refineries are stuck with using Urals and won't have the option to switch to sweeter crude grades.

More Details Emerge About Prince Philip's Car Accident
Prince Philip is recovering in the Royal's Sandringham estate following a "horrendous" crash just outside the grounds Thursday. Commenting on the circumstances of the crash, Mr Warne added: "I think there's no doubt that it was hit (by the duke's car)".

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER