Average price of oil will drop to $67 per barrel in 2019

09 January, 2019, 11:26 | Author: Corey Lynch
  • Goldman cuts 2019 crude price view; sees recovery from current levels

Brent crude futures rose 27 cents to settle at $57.33 a barrel, a 0.47 percent gain. "Stripping out Qatar, which exited OPEC at the end of the month, and Iran, Libya and Venezuela, which were granted exemption from the latest round of cuts, the remaining 11 members pumped 26.89 million b/d-almost 1 million b/d above their collective ceiling of 25.94 million b/d, which went into effect January 1", the survey showed.

Moving forward, the American Petroleum Institute will publish its weekly report on United States crude oil supplies ahead of tomorrow's official DoE report.

Brent crude futures LCOc1 rose $1.39 a barrel, or 2.4 percent, to $58.72.

West Texas Intermediate (WTI) for February delivery increased as much as 77 U.S. cents to US$49.29 a barrel on the New York Mercantile Exchange.

Futures in NY increased as much as 1.9% following six days of gains, the longest streak of increases since July 2017.

"Momentum is coming back into the market from very depressed price levels", Petromatrix strategist Olivier Jakob said. The output cuts presented on behalf of OPEC and the partner states failed to get over this trend.




Oil prices have ticked up again today as markets react to Opec's oil cuts and hopes of a thaw in US-China trade relations. Traders are also expecting that the decision of OPEC and some non-OPEC members including Russian Federation to reduce crude output by 1.2 million barrels per day from this month will significantly alter supply - demand imbalance in the market.

Oil extended its longest run of daily gains in 17 months on renewed efforts between the USA and China to reach a trade deal, and expectations the market will be tightened by OPEC's output cuts. The U.S. Federal Reserve signaling a hold in interest-rate hikes that had spurred risk aversion and volatility across global financial markets is also boosting oil.

Data released by the Energy Information Administration on Friday showed crude inventories in the US rose by 7,000 barrels in the week to December 28, beating expectations for a drop of more than 3 million barrels. Record high crude oil production C-OUT-T-EIA has pushed up USA inventories.

Easing US-China trade tensions would underpin oil at current levels.

S&P Global Ratings said in a statement with its new price assumptions "The on-going trade war between the U.S. and China as well as news of China's economic slowdown, has led to concerns about the outlook for global demand".

S&P Global Ratings said it had lowered its average oil price forecasts for 2019 by $10 per barrel to $55 and $50 per barrel, respectively.

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