Karachi, March 19, 2019 (PPI-OT): Crude Oil
The WTI Crude Oil market initially pulled back, as it continue to see buyers jump into this market, perhaps due to production cuts, perhaps due to a slightly softer US dollar. With that being the case, it’s likely that it should continue to see a lot of momentum entering this market. Brent markets also rallied during the day, breaking above the 200 day EMA it again. The $67.50 level has been significant resistance, but it looks as if it is trying to clear that area. It appears also that the WTI Crude Oil market is going to lead the way, so therefore Brent markets may play a bit of “catch-up” to the WTI market. To the downside, a lot of support at the $65 level, which should cause plenty of buying to re-enter the marketplace. The crude oil production in Libya is rising, but the markets are not much interested in this news, as Libya’s share in the total production volume is very much low.
Crude oil ends higher as OPEC looks to stick to output cuts through June
May Brent prices currently around $1.20 per barrel more expensive than December delivery
The OPEC+ deal has brought stability to crude prices and signs of an extension have taken crude higher
Prices have been further supported by U.S sanctions against oil exports from Iran and Venezuela
On the demand-side, there is concern that an economic slowdown will erode oil consumption
Oil prices were near 2019 highs, supported by supply cuts led by producer club OPEC. U.S sanctions against oil producers Iran and Venezuela are also boosting prices.
U.S. West Texas Intermediate futures were at $59.10 per barrel, virtually unchanged from their last settlement and close to the 2019 high of $59.23 reached the previous day. Brent crude oil futures were up 10 cents at $67.64 per barrel, also close to this year’s peak of $68.14 reached late last week.
The OPEC scrapped its planned meeting in April, effectively extending supply cuts that have been in place since January until at least June, when the next meeting is scheduled.
OPEC and a group of non-affiliated producers including Russia, known as OPEC+, started withholding supply to halt a sharp price drop in the second-half of 2018, when markets came under pressure from surging output as well as an economic slowdown.
OPEC members had agreed to trim 800,000 bpd from October’s production levels for six months through June of this year, with Russia and other allied producers cutting another 400,000 bpd to total 1.2 million barrels in cuts.
Oil futures gained with U.S prices climbing back to their highest finish since November, as OPEC and its allies looked set to continue their crude production cuts until June.
Oil prices have continued to edge higher, hitting their highest levels this year yesterday, as extended OPEC production cuts and lower inventories help underpin prices.