Oil Steady, Supported by OPEC Cuts

Friday, March 1, 2019

Record U.S. output, exports offset some of OPEC's cuts.

Oil prices were broadly steady on Friday as surging U.S. supply and concerns of a global economic slowdown were offset by falling OPEC output.

International Brent crude futures were at $66.39 per barrel at 1231 GMT, up 8 cents from Thursday's settlement.

U.S. West Texas Intermediate (WTI) crude oil futures were at $57.38 per barrel, up 16 cents.

"Oil prices are finely balanced in today's trading session," senior Interfax Energy analyst Abhishek Kumar said.

The 14-member Organization of the Petroleum Exporting Countries pumped 30.68 million barrels per day (bpd) in February, a Reuters survey showed on Friday, down 300,000 bpd from January and the lowest OPEC total since 2015.

In Venezuela, oil exports have plunged by 40 percent to around 920,000 barrels per day (bpd) since the U.S. government slapped sanctions on its petroleum industry on Jan. 28.

OPEC, of which Venezuela is a founding member, is leading efforts to withhold around 1.2 million bpd of supply from the market to prop up prices. Venezuela is exempt from the cuts.

"OPEC and its 10 allies are doing their job and this time they are stubborn," London-based brokerage PVM said in a note, referring to the supply restrictions which have been in place since the start of the year.

The fall in OPEC production comes at a time when the United States is pumping oil at record rates.

The U.S. Energy Department said on Thursday it was offering up to 6 million barrels of crude from national emergency stocks to raise funds to modernise U.S. strategic oil reserves.

Canada's main oil-producing province of Alberta on Thursday raised the amount of crude that companies can produce in April to 3.66 million barrels per day, an increase of 100,000 bpd from the limit imposed in January.

On the demand side, a Reuters poll showed analysts expect global fuel demand to dip this year in the face of a broad economic slowdown.

China's February factory activity fell for a third month as the world's second-largest economy continued to struggle with weak export orders, a private survey showed on Friday.

The weakness is also being felt across the wider region. South Korea's exports contracted at their steepest pace in nearly three years in February as demand from China cooled further.

Despite this, fuel consumption, especially in Asia's developing economies which are key drivers of global oil demand, is so far holding up.

India's diesel consumption, for example, is expected to rise to a record this year amid economic growth of around 7 percent.

Reporting by Henning Gloystein and Ahmad Ghaddar


Categories: Finance Energy Logistics Drilling Activity

Related Stories

DOF Bags Two Deals in Asia-Pacific Region

Saipem Nets Multibillion-Dollar Job at World's Largest Offshore Gas Field

EnQuest Set to Top 2025 Production Forecast on Southeast Asia Gains

Japan’s JERA Signs First Long-Term LNG Deal with India’s Torrent Power

ADES Nets $63M Contract for Compact Driller Jack-Up off Brunei

SED Energy’s GHTH Rig Kicks Off Ops for PTTEP

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Brownfield Output Decline Accelerates, says IEA

Norwegian Oil Investment Will Peak in '25

Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard

Current News

Yinson Production Cuts First Steel for Vietnam-Bound FSO

CNOOC Makes Major Oil Discovery in Bohai Sea

DOF Bags Two Deals in Asia-Pacific Region

CNOOC Launches New Offshore Oil Development in Southern China

Saipem Nets Multibillion-Dollar Job at World's Largest Offshore Gas Field

Indonesia Tenders Eight Oil and Gas Blocks as Output Declines

Fugro Nets Mubadala Energy’s Deepwater Gas Job in Asia

EnQuest Set to Top 2025 Production Forecast on Southeast Asia Gains

Velesto Agrees $63M Jack-Up Drilling Rig Sale with Indonesian Firm

TotalEnergies Sells Stake in Malaysia’s Block to Thailand’s PTTEP

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com