Oil plunges on weak economic outlook, but cuts dictated by OPEC support | Energy & Oil

SINGAPORE, Jan. 21 (Reuters) – Oil prices fell on Monday, weighed down by expectations that China would report weaker economic growth in nearly three decades, as domestic demand weakened American customs were painful.

Nevertheless, badysts expect oil prices to be relatively well supported this year by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC allies, including Russia.

Brent International crude oil futures were at $ 62.30 per barrel at 00:22 GMT, down 40 cents (0.6%) from their last close.

Futures on US crude WTI (West Texas Intermediate) sold 37 cents, or 0.7%, to 53.43 dollars per barrel.

The US bank J.P. Morgan said that there were persistent signs of economic uncertainty.

"The overall outlook remains gloomy, despite the positive new trends of an accommodating Fed (which is now stimulating US mortgage demand), faster easing of China (stabilizing Chinese credit growth) and a more lasting truce between China and the United States, "he said.

Despite this, badysts said that OPEC-led supply cuts would likely provide support for crude oil prices.

"Brent can stay above $ 60 a barrel with respect to OPEC +, expiration of exemptions granted to Iran and slower growth in US production," said JP Morgan.

He recommended investors to "stay a long time" in crude oil.

Bernstein Energy researchers have stated that OPEC-led supply cuts would put the market back into a "supply shortfall" for most of 2019 and that "this should allow oil prices to rise." to rise to $ 70 a barrel by the end of the year from current levels of $ 60 per barrel.

In the United States, energy companies reduced 21 oil rigs to January 18, bringing the total to 852, the lowest since May 2018, announced Friday the energy services company Baker Hughes in a weekly report.

This was the largest decline since February 2016, as drillers responded to a 40% drop in US crude oil prices late last year.

However, production of US C-OUT-T-EIA crude oil increased by more than 2 million barrels per day (bpd) in 2018, reaching a record 11.9 million bpd.

Given the slowdown in the number of rigs, it is unlikely that the growth rate of last year will recur in 2019, even though most badysts expect that the Annual output far exceeds 12 million bpd, making the United States the world's largest oil producer ahead of Russia and Saudi Arabia. (Report by Henning Gloystein, edited by Richard Pullin)