Oil eases economic worries, but cuts led by OPEC support

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices fell on Monday, fearing that an economic slowdown is weighing on fuel consumption, but crude markets remain largely buoyed by supply cuts led by the group. OPEC producers and US sanctions against Iran and Venezuela.

The Brent oil futures were at $ 67.01 a barrel at 0153 GMT, down 15 cents (0.2%) from their last close, but not far off the $ 68.14 a barrel high reached in 2019 last week.

West Texas Intermediate (WTI) futures in the United States were $ 58.32 per barrel, down 20 cents or 0.3% from their latest settlement, and close to their peak of 58.95 dollars in 2019 compared to the previous week.

"The biggest downside risk in our view of oil prices is the sluggish demand for slower economic growth.Our baseline scenario is that world oil demand will grow by 1.3 million barrels a day. in 2019 … A synchronized slowdown in global growth could increase world demand to less than 1 million barrels a day, "Bernstein Energy said Monday.

Japanese exports fell for a third consecutive month in February, signaling increasing tension due to slowing global demand.

Despite this, oil prices have risen about a quarter since the beginning of the year with US sanctions against Iran and Venezuela, and like the Organization of the Petroleum Exporting Countries (OPEC) and non-oil allies. affiliates like Russia – known as OPEC + – are committed. retain 1.2 million barrels a day to support prices.

Saudi Arabia, de facto leader of OPEC, said Sunday that the balance of the oil markets was far from over because stocks were still high.

Russia also said that production cuts would remain in place until at least June.

As a result, Bernstein forecast a stock draw of 37 million barrels in the first quarter for the 36 member countries of the Organization for Economic Co-operation and Development (OECD), which includes most industrialized countries.

The International Energy Agency (IEA) said on Friday it was expecting a modest deficit on the oil markets from the second quarter of 2019.

The United States, where crude oil production has risen by about 2 million barrels a day in recent years, has played a vital role in balancing supply and demand. demand, thanks in large part to the boom in drilling shale formations on the coast.

The number of rigs destined for new oil production in the United States declined in 2019 and hit its lowest level since April 2018 last week, with 833 rigs.

However, crude oil production in the United States rose again in early 2019, reaching a record 12.1 million barrels per day (bpd) in February, Energy Information Administration (EIA) data showed.

Production has since declined to 12 million bpd, but this still makes America the world's largest producer of crude oil.

(Graph: number of American oil rigs – https://tmsnrt.rs/2V1T9qL)

(Report by Henning Gloystein, edited by Richard Pullin)