• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 8 minutes The Inconvenient Truth Of Electric Cars
  • 12 minutes The Plastics Problem
  • 4 hours SHALE MAGIC: Let the oil flow: US to lead oil output growth through 2030: ConocoPhillips chief economist
  • 4 hours Philadelphia Energy Solutions seeks to permanently shut oil refinery - sources
  • 9 hours IMO 2020
  • 2 hours Climate change & Wildfires: More Wildfires To The Western U.S., Will Affect Tens Of Millions Of People
  • 7 hours To be(lieve) or Not To be(lieve): U.S. Treasury Secretary Says U.S.-China Trade Deal Is 90% Done
  • 9 hours Ireland To Ban New Petrol And Diesel Vehicles From 2030
  • 11 hours EIA reports 12 mm bbls Inventory draw . . . . NO BIG DEAL . . . because U.S. EXPORTED RECORD 12 MILLION BARRELS DAY OF CRUDE + PETROLEUM PRODUCTS ! ! ! THAT'S HUGE !
  • 10 hours Its called reality: Economic, policy challenges to make Asia's energy transition painfully slow
  • 10 hours Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 6 hours On the hobby side of things
  • 1 hour Democrats Green Beauty Pageant
  • 10 hours Oil Demand Needs to Halve: Equinor
Oil Holds Steady Amid Small Rig Count Decline

Oil Holds Steady Amid Small Rig Count Decline

Oil prices held steady on…

Iran: A Geopolitical Time Bomb

Iran: A Geopolitical Time Bomb

Oil markets have turned particularly…

Arab Bank: Brent Crude Prices To Recover To $60-70

tankers Gulf

Brent Crude prices are expected to trade between $60 and $70 a barrel by the second half of this year, unless a sharp global economic slowdown mars the outlook for global oil demand, the Arab Petroleum Investments Corporation (APICORP) said in its latest energy research note.

Following the four-year highs of $85 Brent Crude in October, the international benchmark slumped to just $54 at the end of 2018. The key reasons were concerns about global economy, rising production in the three biggest oil producers—the U.S., Russia, and Saudi Arabia—and a drop in sentiment, said (APICORP), a multilateral development bank set up in 1975 under an agreement signed by the ten Member States of the Organization of Arab Petroleum Exporting Countries (OAPEC).   

The collective production cut of 1.2 million bpd from OPEC and its Russia-led non-OPEC partners in the deal might not be enough, APICORP warns, but noted that “The dynamics of oil prices in 2019 will also depend in large part on OPEC’s effectiveness in implementing the cuts, balancing the market and reinforcing the credibility of its signals.”

“While OPEC is expected to cut its output in 2019 in an attempt to balance the market, US production should maintain its upward momentum,” the bank said.

According to APICORP, the pace of global oil demand will be more important for oil prices than the supply side of the market.

Related: Oil Posts Longest Rally In 17 Months

“According to recent research from the OIES, stronger than expected oil demand growth has been responsible for 80% of the market rebalancing and thus any slowdown in the global economy that results in lower demand growth will have a drastic effect on oil prices. And concerns about the global economy have been mounting,” APICORP said.

“In conclusion, purely based on fundamentals, a collective cut of 1.2 mb/d between OPEC and its allies, high probability of supply losses from Iran, Venezuela, Libya and Canada, and global oil demand growth of 1.4 mb/d, the market will achieve balance in 2019.”

Oil prices will continue to be under pressure until the market begins to show signs of stock drawdowns, according to APICORP.

“OPEC’s primary challenge will be to address the physical market imbalances, and assert its credibility to consistently manage expectations and sentiment,” the bank said.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Jim Miceli on January 09 2019 said:
    I seem to believe that while some are squabbling about the price of Oil , I projected (WTI) between 50.00 to 53.00 per barrel just days ago and she's ticking at 52.15 +- 0.-- and while I myself prudent about the future of the various large scale economies as for stability and growth , I would consider these countries to hold a Work Shop as for Oil , Gold and Financials. The mumbo jumbo can hit the Tundra. This is all out Business. Lets jam.
  • Mamdouh G Salameh on January 09 2019 said:
    2019 could see a resurgence in oil prices beyond $80 a barrel underpinned by global oil fundamentals that are still virtually as robust as in 2018 with the global economy projected to grow at 3.8% in 2019, the global oil demand also projected to add 1.4 million barrels a day (mbd) in 2019 over 2018 and with China’s demand for oil accelerating unabated.

    Three bullish developments have recently helped push oil prices up. One is the growing feeling in the global economy that the trade war between the US and China could be coming to an end.

    The second development is that Saudi Arabia needs an oil price far higher than $80 a barrel to balance its budget. That is why Saudi Arabia is determined to ensure that the recently-agreed OPEC+ cuts amounting to 1.2 mbd will do the trick and reduce the glut in the market. The Saudis have signalled to the global oil market their determination to defend oil prices by cutting an estimated 639,000 b/d from its exports in December 2018. Moreover, there is evidence that Saudi Arabia is prepared to do deeper production cuts even cutting exports 800,000 b/d below November levels, which appears to be a larger reduction than required as part of the OPEC+ agreement.

    The third development is the reported slowdown in US shale oil production. The latest disclosure by the Wall Street Journal (WSJ) that US shale companies have over-hyped the production potential from thousands of shale wells comes in the footsteps of many authoritative organizations including MIT accusing the US Energy Information Administration (EIA) of overstating US oil production.

    The EIA’s claim that US oil production reached 11.7 mbd in 2018 is overstated by at least 3 mbd made up of 2 mbd of liquid gases and 1 mbd of ethanol all of which don’t qualify as crude oil. In fact International Exchanges around the world don’t consider them as substitutes for crude oil. And if the International Exchanges don’t accept them as substitutes, then they are not crude. Therefore, US oil production could have been no more than 8.7 mbd in 2018.

    And despite bullish influences pushing oil prices up, a bearish element may still be at play in 2019, namely the failure of US sanctions to cost Iran the loss of even one barrel from its oil exports leading the global oil market to realize that there will not be a supply deficit in the market.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

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