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International Business: Opec cuts forecast of global oil demand

15 March 2019

"US sanctions on Venezuelan petroleum products have cemented support for oil prices", said Benjamin Lu of Singapore-based brokerage Phillip Futures.

Supply disruptions out of OPEC members Venezuela and Iran helped support oil prices. US West Texas Intermediate rough futures were $ 57.89 per barrel, an increase of $ 1.02, or 1.79 percent, compared to the previous settlement price.

While the overall trend that's been pushing prices higher comes from the reduced output from OPEC countries and their allies, on a more short-term, day-to-day basis these prices fluctuate largely based on new information related to the U.S.'s domestic supplies and output.

Worldwide benchmark Brent crude was trading at $67.83 per barrel at 0650 GMT with a 0.3 percent gain after closing Wednesday at $67.62 a barrel.

Oil prices have risen since the beginning of this year thanks to supply cuts led by OPEC.

In the US, a Commerce Department report showed sales of new USA single-family homes fell more than expected in January, suggesting housing market weakness early in the first quarter.

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The report said US crude oil production averaged 11.9 million barrels per day in February, lower than the January average. The agency also slightly reduced it's 2020 predictions, bringing it's forecast down from 13.2 million barrels a day down to 13 million.

An unexpected dip in USA crude oil inventories and production also supported prices, traders said. It kept its forecast for growth in global oil demand this year unchanged at 1.24 million bpd.

Iraq's State Oil Marketing Organization (SOMO) is looking to expand its crude oil trading activities with more spot sales and with opening offices outside Iraq, the director of SOMO's crude oil and gas marketing division, Ali Nazar Faeq Al-Shatari, said at the at the S&P Global Platts Asian Refining Summit on Thursday. Petrol stocks fell by 5.8 million barrels, compared to analysts' forecasts in a 2.5 million barrel survey at Reuters.

Gasoline inventories on the other hand did eke out a small increase of 0.4m barrels.

EIA's data also showed that on the exports side, US crude oil exports increased while domestic production rose as well.

International Business: Opec cuts forecast of global oil demand