Oil prices rise as equities rally, Libyan supply outage continues

Andrew Cummings
December 13, 2018

Citigroup said it forecasts global benchmark Brent crude trading between $55 and $65 per barrel in 2019. "We believe the (OPEC) cuts were sufficient", Yazhari said, predicting a "relatively balanced oil market" and stable inventories next year.

UAE Energy Minister Suhail Al Mazroui has said that Qatar's decision to withdraw from OPEC would not affect the continuation of production.

Since Canada's top oil-producing province announced mandatory output curbs on December 2, the spot price of Western Canada Select crude has surged more than 70 percent. Crude rose today to trade above US$61 a barrel.

"Crude futures are roughly unchanged from just prior to the OPEC agreement as the market is apparently expressing concerns over an indicated slow start to Russia's output reductions next month", Jim Ritterbusch, president of Ritterbusch and Associates in Chicago, said in a report.

OPEC is to discuss the joint oil output cut with Non-OPEC producers, including Russian Federation on Friday. "The decision was a very important step for the oil producers, the oil market and development of the oil industry in general".

Based on International Energy Agency's (IEA) forecast, Kotak estimates that incremental non-OPEC supply supported by rising production from the USA in CY2019 will now barely exceed incremental oil demand of 1.4 million barrels per day assuming OPEC and its allies manage supplies through the year.

Daily oil production stood at 801,000 barrels in November 2018, of which 733,000 barrels accounted for crude oil and 68,000 barrels for condensate, while 6,000 barrels of oil products were exported. "On top of this, Saudi Arabia also needs higher oil revenues to fund domestic Saudi spending".

The corporation confirmed it will not negotiate with the armed group and demanded them to leave the field immediately, accusing them of committing violence against the field's staff, robbery, and interrupting oil production.

In exports, Saudi Arabia's hit their highest in 20 months in September, according to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported oil figures from 114 countries. "These worries about the global economy and the demand outlook that follows on that for oil are a bigger and bigger negative for the market".

Unlike when a deal was reached to cut supply in 2016, the market is more skeptical this time around about exactly how the Organization of Petroleum Exporting Countries can go about supporting prices.

Other reports by iNewsToday