• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 8 mins The lies and follies of the "cry wolf" enviros: No more fire in the kitchen: Cities are banning natural gas in homes to save the planet
  • 4 hours China Burns More Coal than the Rest of the World !
  • 47 mins Iran Finds New Oil Field With Over 50 Billion Barrels: Rouhani
  • 4 hours "Climate Migrants"
  • 24 mins CHK Trading @ 90 Cents
  • 6 hours New York State Taxpayers Lose 900 Million to Tesla
  • 3 hours Does Brazil Auction Flop Forbode the Outcome of the Saudi Aramco IPO ?
  • 2 hours China's Renewables Boom Hits the Wall
  • 22 hours Water, Trump, and Israel’s National Security
  • 11 hours Giant Windmills Wildly Unpopular
  • 24 hours The End For Deutsche Bank and the European Union?
Ross McCracken

Ross McCracken

Ross is an energy analyst, writer and consultant who was previously the Managing Editor of Platts Energy Economist

More Info

The Exceptional Factors Driving Oil Markets

refinery

Brent crude moved over $70/barrel in the first half of April, despite a weak global economy. In its latest World Economic Outlook, the IMF reduced both its estimate of global growth in 2018 and its forecast for 2019, which fell from 3.7% to 3.3%. If realised, this would be the weakest expansion of global GDP since the 2009 financial crisis.

Although the IMF sees something of a recovery in 2020, the OECD’s composite leading indicator has been below its long-term average of 100 since July 2018 and remains on a downward trend, reaching 99.10 in February, again the lowest level since 2009.

There has been some loosening of monetary and fiscal policy in the US, China and Europe, and Chinese-US trade talks appear to be inching towards some kind of resolution, but the world economy continues to skirt recession. The IMF warns that the prospects for recovery remain fragile, but financial markets appear to be taking a ‘glass-half-full’ attitude.

Higher oil prices and weak economic growth are not conditions that will stimulate oil demand. What growth there is will be captured mainly by US producers, raising the cost in terms of market share to OPEC and Russia of their current production curbs, complicating their decision on whether to extend current policy beyond the end of June.

Supply tightening

Higher oil prices are justified in the short-term because of the sharp fall in OPEC crude output, which according to S&P Global Platts’…




Oilprice - The No. 1 Source for Oil & Energy News