Oil bulls oust bears in the first week of 2019

Oil prices have started 2019 on the upswing. (Reuters)
Updated 07 January 2019
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Oil bulls oust bears in the first week of 2019

RIYADH: After dwindling to near 16-month lows at the end of 2018, oil prices bounced back in the first week of the year, helped by OPEC’s proactive output cuts and positive economic news from the US.
The year 2019 started with a progressive rebound in oil prices after the 2018-year end nose-dive when Brent crude ended slightly above $52 per barrel. The first week in 2019 closed with Brent crude at $57.06 per barrel and WTI at $47.96 per barrel — one of the best weekly gains in two years.
It marked a change in the bearish sentiment that produced heavy losses in December 2019 when Brent averaged $56.55, the lowest monthly average since September 2017.
OPEC output fell by 530,000 bpd to 32.6 million bpd in December, which is the sharpest pullback since January 2017.
As usual, Saudi Arabia handled most output cuts in December of 420,000 bpd to 10.65 million bpd from a record of just above 11 million bpd reached in November 2018.
The Saudi output cut was compounded by unplanned losses in Iran and in Libya.
Saudi Arabia proactive move has confounded some of the raised voices that called for depressed oil prices “lower for longer.”
These voices suggested oil prices would be weak in 2019 with sluggish demand for crude and the uncertainty over full compliance from OPEC members, including the largest producer Saudi Arabia, over the agreed 1.2 million bpd supply reduction.
On the physical market side, expectations for continued strong oil demand growth in 2019 remain in place, despite concerns about the global economic slowdown that were offset by the positive economic data from the US.
The steep downward price volatility that the oil market experienced at the end of 2018 may have attled US shale oil investors.
During the last quarter of 2018, macroeconomic headwinds raised the specter of a slowing global economy and lower oil demand growth, putting downward pressure on prices while the physical market remained strong throughout 2018.


Oil eases from 4-month high on global growth worries

Updated 4 min ago
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Oil eases from 4-month high on global growth worries

  • The losses came amid worries over global economic growth after the US Federal Reserve highlighted signs of a slowing economy
SYDNEY: Oil prices edged lower on Thursday, retreating from a four-month peak, as fears of a slowing global economy weighed on market sentiment.
US West Texas Intermediate (WTI) crude futures were at $60.16 per barrel at 0040 GMT, down 7 cents, or 0.1 percent, from their last settlement. WTI had earlier hit a high of $60.19 a barrel — the highest since November 12.
International Brent crude oil futures were at $68.47 a barrel, down 3 cents from their last close. Brent touched $68.57 a barrel on Wednesday, its highest since November 13.
The losses came amid worries over global economic growth after the US Federal Reserve highlighted signs of a slowing economy.
Markets have been underpinned, however, by efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to curb supply, and losses were checked as widely watched US data showed supplies were tightening.
“Oil markets appear convinced that the continued effects of the Saudi Arabia oil production cuts and falling exports to the US will continue to outweigh the concerns of rising US production,” said Alfonso Esparza, senior market analyst at brokerage, OANDA.
US crude oil stockpiles last week fell by nearly 10 million barrels, the most since July, boosted by strong export and refining demand, the Energy Information Administration said on Wednesday.
Stockpiles fell 9.6 million barrels, compared with analysts’ expectations for an increase of 309,000 barrels. The draw brought stockpiles to their lowest since January.
Gasoline and distillate inventories both fell by more than expected. Gasoline stocks fell by 4.6 million barrels, while distillate inventories fell by 4.1 million barrels.