Published: Sun, October 14, 2018
Economy | By

OPEC downgrades oil demand growth outlook for 2018 and 2019

OPEC downgrades oil demand growth outlook for 2018 and 2019

Oil dropped on Thursday to extend big losses from the previous session as global stock markets suffered a rout, with crude prices also taking a hit from a weekly industry report showing United States crude inventories had risen more than expected.

Brent crude fell $1.55, or 1.9%, to $81.54 USA a barrel late Thursday morning, off the session low of $81.14, its weakest since September 26.

Brent crude fell $1.55, or 1.9 percent, to $81.54 a barrel by 10:53 a.m. ET (1453 GMT), off the session low of $81.14, its weakest since September 26. OPEC has been under the hit list from the USA for declining the increased outcome to answer rising oil prices.

Iranian Oil Minister Bijan Zanganeh on Monday described a Saudi claim that the kingdom could replace Iran's crude exports as "nonsense".

"We still estimate oil demand growing at 1.2 million to 1.5 million barrels per day for this year, and see the risk of a slowdown in 2019 if trade tension escalates", ANZ Research analysts said in a report.

"This is due to a weaker economic outlook, trade concerns, higher oil prices and a revision to Chinese data", said the IEA, which advises industrialized countries on energy policy.

Of the 220.4 million metric tonnes (million MT) of crude oil imported by India in 2017-18, about 9.4 per cent, was from Iran.

On Tuesday, the International Monetary Fund cut its global economic growth forecasts for 2018 and 2019, raising concerns that demand for oil may also slump.

The price of WTI crude oil futures are settling the day at $74.96, up $0.67 or 0.9% on the day.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.2 million barrels, API said. That is down from at least 2.5 Mmbpd in April, before President Trump in May withdrew the US from a 2015 nuclear deal with Iran and reimposed sanctions.

The new round of sanctions targeting Iran's oil sector are due to be put in action on November 4. "The market remains well supplied", he told a briefing. Gasoline futures dropped as much as 2 percent to $1.9808 a gallon, sliding for a third day. "As a result, Indian refiners will increase dependence on the remaining Middle Eastern crude oil suppliers (mainly Saudi Arabia and Iraq), aside from Iran", Moody's has said recently.

Crude had surged to a four-year high earlier this month with impending American sanctions against Iran set to curtail exports from the OPEC's third-largest producer.

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