Oil wavers as OPEC pushes supply cut need, demand fears weigh

Crude oil

OPEC cuts forecast for global crude demand in 2019

Rating agency S&P Global raised its Brent oil price assumptions back up to $60 a barrel, on the back of the production cuts by OPEC and Russian Federation. Their agreement is due to expire at the middle of the year. They will continue to exercise restraint in putting barrels on the market.

With OPEC withholding supply and US sanctions preventing Iranian and Venezuelan oil from entering markets, global crude flow data in Refinitiv showed a slight supply deficit likely appeared in the first quarter.

"This highlights the continued shared responsibility of all participating producing countries to avoid a relapse of the imbalance and continue to support oil market stability in 2019", the oil cartel noted.

In a bid to force Maduro to leave office, the United States slapped sanctions on Venezuela and its national oil industry in January, blocking exports of its oil to U.S. customers.

President Donald Trump said on Thursday the United States was doing well in trade talks with China, but that he could not say whether a final deal would be reached. Brent touched $67.76 a barrel on Wednesday, its highest since November 16.

OPEC+ ministers will meet on April 17-18 to decide production policy.

Opec forecasts non-member producers to boost output in 2019 by 2.24 million bpd, 60,000 bpd more than expected previously.

"World oil demand growth in 2019 was unchanged at 1.24 million barrels per day with total world oil demand marginally below the 100 million barrels per day mark". As a outcome, it indicated the risk of a renewed surplus emerging in the fourth quarter, even as the group's output declines as a result of planned and involuntary cutbacks.

In Venezuela, oil production and exports have been disrupted by a political and economic crisis that has caused massive blackouts and supply shortages, while Washington has barred USA companies from doing business with the Venezuelan government, including state-owned oil firm PDVSA.

Most of the reductions came from Venezuela, which saw output drop by 142,000 bpd.

Oil futures reached four-month highs on Thursday, but later dipped after a report that a meeting between the US and Chinese presidents to resolve a trade dispute had been delayed.

"Although there are signs that the situation [with electricity] is improving, the degradation of the power system is such that we can not be sure if the fixes are durable", said the agency, a watchdog for western oil consuming countries, in a post on its site Friday. But a glut could re-emerge in the fourth quarter when demand for OPEC's crude will be about 720,000 bpd lower than the group's current output.

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