0 HTTP/1.1 200 OK Cache-Control: no-cache, must-revalidate, max-age=0 Cache-control: no-cache="set-cookie" Content-Type: text/html; charset=UTF-8 Date: Sat, 16 Feb 2019 13:01:25 GMT Expires: Wed, 11 Jan 1984 05:00:00 GMT Link: ; rel="https://api.w.org/" Referrer-Policy: strict-origin-when-cross-origin Server: nginx Set-Cookie: AWSELB=C74FD9FB1C52DE23585B6D22AAC38A0EE36D2A7D6ED95F87414647BAD18CD2A6D80B1B7834BD8966B4700170E225B3A3D0DB2DA9728AD5F44A4A3B1112D9B2823C5DBAA2D5;PATH=/;MAX-AGE=30 X-Content-Type-Options: nosniff X-Frame-Options: SAMEORIGIN X-TEC-API-ORIGIN: https://www.icis.com/explore X-TEC-API-ROOT: https://www.icis.com/explore/wp-json/tribe/events/v1/ X-TEC-API-VERSION: v1 X-XSS-Protection: 1; mode=block transfer-encoding: chunked Connection: keep-alive 3bca Lower inventories, higher demand, economic growth to support 2018 oil pricing - OPEC - ICIS Explore

Lower inventories, higher demand, economic growth to support 2018 oil pricing - OPEC

Source: ICIS News


Pumpjacks in Canada

LONDON (ICIS)--A healthy global economic outlook, stronger US consumption and high conformity levels with production cut accords are all expected to support crude oil pricing through 2018, OPEC said on Thursday, as prices spike on tensions in the Middle East.

Large US crude stock draws and a weaker dollar contributed to momentum from OPEC production cut compliance in March, according to the cartel’s latest monthly oil report, helping to boost March OPEC reference basket prices despite the low demand season amid seasonal refinery turnarounds.

Strong vehicle sales in Europe and China and the approach of the US summer driving season boosted market optimism for the year, with OPEC revising up expectations of global demand growth in 2018 by 30,000 bbl/day to 1.63m bbl/day.

Firming crude market dynamics spurred a flurry of futures and options trading, with the number of ICE Brent contracts rising to over 615,000, the highest level ever.

Fears of a more direct confrontation between eastern and western countries in Syr 3fd9 ia sent futures prices to a three-year high on Wednesday, despite fears of a trade war between the US and China dampening market sentiment last week.

Further drops in Venezuelan crude output due to the economic crisis in the country drove down OPEC and non-OPEC production cut compliance rates, with production dropping 55,300 bbl/day month on month in the country.

Saudi production dropped 46,900 bbl/day month on month in March, while Angolan output fell 81,700 bbl/day, bringing total OPEC member state production cuts to 201,000 bbl/day during the period.

Despite the OPEC and non-OPEC production cuts, global crude supply rose 180,000 bbl/day in March, driven by US and Canadian output hikes, but Saudi energy minister Khalid Al-Falih reportedly declared himself satisfied with progress made in balancing oil market.

Speaking to Reuters on the sidelines of the International Energy Forum in New Delhi, Al-Falih stated that a substantial portion of the global oil supply glut has been cleared, adding that Saudi Arabia does not want prices to rise to “unreasonable” levels.

Despite this, oil stocks remain above the five-year average.

OPEC also noted a strong start for China’s first crude futures contract, with 40m paper barrels of oil traded on the first day of the instrument’s launch on the Singapore International Energy Exchange (INE).

Made up of six Middle East grades and China’s Shengli crude, the contract “could be a far more useful marker for China and other major regional importers,” OPEC said.

At some points, the volume of trades conducted on INE beat out established global rivals Brent and WTI, but daily trade volumes so far have averaged around 25,000 contracts.

The key risk factors of the nascent contract for western investors are Chinese government intervention, liquidity, currency risk and limited numbers of potential buyers for physical delivery in China, OPEC said.

Despite those issues, the contract could grow into an effective regional counterweight to more established futures contracts, the cartel added.

“Middle Eastern producing nations will be watching closely as they could, in time, face pressure from their Chinese buyers to adopt this benchmark for pricing their physical crude contracts,” OPEC said.

Pictured: A crude oil producing field in Alberta, Canada
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