OPEC Offsets Iran Oil Loss, Sees Lower 2019 Demand

19 December, 2018, 01:58 | Author: Darnell Patrick
  • Brent crude rises to $61 on Libyan supply cut, US inventories

OPEC's output agreement with Russian Federation and Canada's decision to mandate production cuts could create an oil market supply deficit by the second quarter of next year, if top producers stick to the deal, the International Energy Agency said in its monthly Oil Market Report.

Prices rose almost one-percent earlier in the session, but the big wave of buying that could've triggered a breakout to the upside failed to materialize.

The baseline for the cut is October's production as reported in OPEC's December Monthly Oil Market report, except for Kuwait, which according to delegates will cut from September production.

A drop in US crude stockpiles, though less than expected, has helped boost sentiment, analysts said.

Daily U.S. production now tops 11.5 million barrels and the U.S. Energy Information Administration (EIA) expects domestic production to average 10.9 million barrels a day this year, rising to a 12.1 million average in 2019. This follows a 7.3 million barrel decline in the previous week. The Wall Street Journal survey had shown expectations for supply increases of 1.8 million barrels in gasoline and 1.3 million barrels in distillate inventories.

The United States, where weekly crude production has hit a record, is set to end 2018 as the world's top oil producer, ahead of Russian Federation and Saudi Arabia.

Iranian output posted the biggest decline, of 380,000 bpd. "We envisage a Brent price of $70 per barrel at the end of 2019, and indeed at the end of 2020", said commodities analysts at Commerzbank, in a note. Distillate inventories were up the same week by 712,000 barrels, compared to an expected build of 1.801 million barrels.

Oil remains sideways as energy traders await a decline in United States or OPEC production.

However, despite Tuesday's momentary respite from the price free fall that has characterized crude trading in recent weeks, Tamas Varga, analyst at PVM Oil Associates, warned that "The dollar is a bit weaker, but other than that, I don't see any reason why this market should rally right now; it fell quite hard yesterday, so it might correct higher".

In a sign that China wants to lower trade tensions with the United States, the country made its first major USA soybean purchases in more than six months on Wednesday.

"The more OPEC+ tries to support prices by withholding oil from the market, the more they give the US shale sector an out from rationing supply growth themselves", Citi said in a research note written by a team led by Ed Morse, the firm's global head of commodities.



Sanctions will block path to peace, warns North Korea
Trump's tweeted statement came in response, he said, to "many people" asking how the US negotiations with North Korea were going. It was the leader's first public activity in two weeks after visiting a shoe factory in Wonsan earlier this month.

Mueller Defends FBI’s Questioning of Flynn at White House
Flynn was duped into lying in an interview with Federal Bureau of Investigation agents. Flynn, however, agreed to be interviewed alone.

Mohamed Salah Named BBC African Footballer Of The Year
He also predicted Barcelona to play a draw with Tottenham Hotspur on Tuesday night in the Champions League fixture at Camp Nou. At Anfield, Mohamed Salah's solitary goal saw Liverpool beat Napoli 1-0 to book their spot in the tournament's next round.

Koscielny set for first Arsenal start since May
Arsenal manager Unai Emery has conceded he may look into attaining a new defensive option in the January transfer window, with the centre of his defence suffering from a lack of depth and fitness.

Pelosi all but assured of becoming House speaker
After Mrs Pelosi said they should "call a halt to this", Mr Trump said: "It's not bad, Nancy - it's called transparency". During his bid for the presidency and for some time after winning it, Trump promised that Mexico would pay for the wall.

Eyes in the sky: Weekend meteor shower on
For optimal viewing conditions, the sky must be clear, get as far away from city lights as possible, and face south. Light from the moon makes it harder to see some fainter meteors, so it's best to wait until it sets to head outside.

Boston Celtics make franchise history with 133-77 victory over Chicago Bulls
The Celtics scored nine straight points in the last four minutes of the first quarter to take a lead they would never relinquish. The Celtics may need you to come off the bench, because they have about three healthy players for Monday night's game.

Theresa May vows to contest no-confidence vote outside Number 10
The vote will take place between 6pm and 8pm local time Wednesday and the result will be announced later in the evening. The U.K. leader is facing a no-confidence vote that will see her removed as party and government leader if she loses.

Nissan, Ghosn, Kelly indicted over under-reported pay
It was through his role with the latter that he signed off on the French manufacturer's return to Formula 1 as a full constructor. Despite selling fewer vehicles, Renault has a 43% shareholding in Nissan , while Nissan's stake in Renault is only 15%.

Marlboro owner Altria makes £1.4bn bet on cannabis
Altria will make Cronos its exclusive partner for all world-wide cannabis-related investments, with some limited exceptions. Michelle Wine Estates and Marlboro, has announced a $1.8 billion investment in Canadian cannabis company Cronos Group.