OPEC cuts oil demand estimate in 2019

OPEC cuts oil demand estimate in 2019

Financial markets settled down Wednesday following the previous day's big moves when an easing of concerns over an imminent USA -led military strike on Syria sent stocks sharply higher and oil prices down. Year to date, OPEC's reference basket is up $20.21 (40%) per barrel compared to the first nine months of 2017.

One of the reasons for the additional demand for Saudi oil is that the crude arbitrage from the United States is shut so the Indian buyers have to turn to Middle Eastern barrels, said one of the sources.

India imports an average of 25 million barrels per month from Saudi Arabia. They also expect supply rise of 422,000 barrels in gasoline, but a decrease of 1.71 million barrels in distillates.

A drop in USA oil production this week supported prices.

Again, U.S. West Texas Intermediate (WTI) crude was down by 41 cents, also about half a percent, to 74.55 dollars a barrel, after rising almost 1 percent in the previous session.

Russian Federation lifted September production by 150,000 barrels a day to a post-Soviet era record of 11.54 million barrels a day. At the same time, it added 200,000 barrels a day to its estimate for non-OPEC supply this year as the U.S., Canada, Kazakhstan and Brazil grow faster than expected. The world will need nearly 900,000 fewer barrels from the group each day in 2019 - equivalent to Libya's average output this year.

Stock markets worldwide bounced back on Friday after a multi-day sell-off but remained on track for their biggest weekly losses in months, while U.S. Treasury yields inched higher and the dollar held its gains.

That storm curtailed more than 90 percent of oil production in the U.S. Gulf of Mexico, more than 1.6 million barrels per day of crude. The American Petroleum Institute reported that US crude supplies rose 9.7 million barrels for the week ended October 5, according to sources.

While crude output has been cut because of the hurricane, "down time is expected to be brief and Gulf of Mexico output now accounts for a comparatively small portion of total USA production", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. The cartel's estimate of total US production in 2019 increased from 17.52 million barrels a day to 17.67 million barrels. Refinery utilization rates fell by 1.6 percentage points.

US West Texas Intermediate (WTI) crude futures were down by US$1, or 1.4 per cent, at US$72.17, having also fallen to their lowest since Sept 28.

Asked about where Brent Crude prices will be on January 1, 2019, Taylor said he wouldn't be surprised to see it $5-10 below current levels, because the season when the market won't need so much crude oil is coming.

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