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OPEC projects to tighter oil market in 2019

14 April 2019

The West Texas Intermediate for May delivery gained 0.31 US dollar to settle at 63.89 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery climbed 0.72 dollar to close at 71.55 dollars a barrel on the London ICE Futures Exchange.

However, global oil markets remain firm, amid Opec+ supply cuts, US sanctions on oil exporters Venezuela and Iran and increased fighting in Opec member Libya.

Oil markets have been lifted by more than 30 percent this year by supply cuts led by the Organization of the Petroleum Exporting Countries and USA sanctions on oil exporters Iran and Venezuela, plus escalating conflict in OPEC member Libya.

Siluanov said oil prices could drop to $40 per barrel or even less for up to one year.

Current oil demand stands around 100 million bpd.

"Although it is still early days, the major centers of oil demand growth are performing strongly; in China, the economy seems to be reacting to the government's stimulus measures", it said, also reporting strong demand in India.

On the demand side, Chinese data showed exports rebounded last month, driving USA and euro zone bond yields to three-week highs and helping offset weaker imports and reports of another cut in German growth forecasts.

With this decline in production, which according to official records is due to a natural decline from the depletion of some wells and the lack of investment in the prospecting, surveying and exploration segments in the last ten years, Nigeria has moved ahead and consolidated its position as the main producer in Africa. They meet on June 25-26 to decide whether to extend the pact.

In March, OPEC crude oil production tumbled by 550,000 b/d with losses in Venezuela, together with lower output from Saudi Arabia and Iraq.

However the IEA warned that demand fell in developed OECD countries by 0.3 million barrels per day (mbd) in the last three months of 2018 - "the first such fall for any quarter since the end of 2014".

The rig count fell for the past four months as independent exploration and production companies cut spending on new drilling to focus on earnings growth instead of increased output.

Two days ago, OPEC reported Venezuela's March output sank to 732,000 bpd, citing independent sources, while figures provided by the country put production at 960,000 bpd.

OPEC projects to tighter oil market in 2019