Oil disappears as rising US supply weakens OPEC cuts

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Oil prices fell after the peaks reached in 2019 on Wednesday, with rising US supply and slowing economic growth, easing upward pressure from supply cuts led by the producers' club. OPEC, and sanctions imposed by Washington on Iran and Venezuela.

The West Texas Intermediate (WTI) crude oil futures price hit a high of $ 56.39 a barrel in 2019 on Wednesday, but fell back to $ 56.15 a barrel at 5:23 am GMT, slightly above its last agreement.

Brent International crude oil futures were trading at $ 66.33 a barrel, down 12 cents (0.2%) from their last closing price, but still well ahead of their 2019 highs ( $ 66.83 per barrel since Monday).

Oil prices were supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC member Saudi Arabia, the largest exporter of crude oil, is expected to reduce its light crude oil shipments to Asia in March as part of tightening markets.

OPEC and some unaffiliated producers, such as Russia, agreed late last year to reduce production by 1.2 million barrels per day to avoid a significant swelling of the stock.

"We have reduced Saudi crude production in line with announcements … (and) now assume that Saudi Arabia will produce in the first three quarters of 2019 a level below the target of 10.31 million barrels a day. he had agreed at the December 7 meeting of OPEC. OPEC meeting ", said the French bank BNP Paribas in a note.

As a result of these cuts, the BNP said it expects oil prices to "go back up to the third quarter of 2019," with Brent averaging $ 73 per barrel. here and the WTI at 66 dollars on average.

The sanctions imposed by the United States on oil exporters, Iran and Venezuela, were another determinant of oil prices.

Despite sanctions, Iran's crude exports exceeded expectations in January, averaging 1.25 million bpd, according to Refinitiv's ship tracking data.

Many analysts were expecting Iran's oil exports to drop below one million bpd after US sanctions were imposed last November.

Production of US crude oil, which increased by more than two million bpd in 2018, reached a record 11.9 million bpd in 2018, thanks to a booming shale oil production, which is expected to continue increase, according to the Energy Information Administration.

BNP Paribas said rising US production would drive oil prices down by the end of the year, while Brent would drop to $ 67 a barrel on average in the fourth quarter and WTI to $ 61 on average.

"US Oil shale-led growth in oil production will be increasingly exported to international markets, while the global economy is expected to experience a synchronized slowdown in growth," the bank said. Reuters / NAN)

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