Oil hits four-months highs, Brent reaches $68 on tighter supply

Andrew Cummings
March 15, 2019

"It will see the United States account for 70 percent of the rise in global oil production and some 75 percent of the expansion in [liquefied natural gas] trade over the next five years".

The U.S. crude output downward revisions is set to ease worries that the glut of supply in the global oil market, coming mostly from the U.S., will be less than anticipated.

West Texas Intermediate Crude oil futures for April ended up $1.39, or 2.4%, at $58.26 a barrel, the highest settlement in four months.

The latest headlines are crossing the wires from Iraq's Oil Minister Jabar al-Luaibi, as he says that Iraq is seeking a higher price for crude oil than current market prices.

Opec sources have said an extension of the pact is the likely scenario. The Energy Information Administration expects production to increase by 2020 by 730,000 barrels per day to 13.03 million barrels per day, an increase that is less than the expected 790,000 barrels per day.

OPEC may extend production cuts as demand is expected to go down this year.

Oil rallied on Wednesday on USA government data showing a surprise fall in crude inventory and a lower-than-expected estimate of US crude production growth.

Forecasts slowed USA production to a record of 13 million barrels per day (bps) until the third quarter of 2020, instead of the second quarter of previous forecasts. Most of the reduction in United States imports was of light, sweet crude oil, as those barrels were replaced by domestic production of a similar quality.

"While oil demand is expected to grow at a moderate pace in 2019, it is still well below the strong growth expected in the non-OPEC supply forecast for this year", OPEC said in the report.

Growth in China's industrial output fell to a 17-year low of 5.3 percent in the first two months of the year, official data showed on Thursday, pointing to further weakness in the world's second-biggest economy and top crude importer.

Data from the Petroleum Institute showed that distillate stocks, including diesel and fuel oil, increased by 195,000 barrels, compared to a forecast of 1.9 million barrels.

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