Oil Price Forecast: Crude Could Crumble if Growth Concerns Catch Fire Again

A pump jack stands at dusk in the Permian Basin area in Texas U.S. Bloomberg  Angus Mordant

A pump jack stands at dusk in the Permian Basin area in Texas U.S. Bloomberg Angus Mordant

In fact, the sources had also revealed that the OPEC might even raise output from the beginning of third quarter of 2019, if Venezuelan and Iranian crude supply fall further and the crude oil prices keep surging.

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. "Iranian production was stable at 2.7 million barrels per day, (but) could take a further hit if the United States cuts import waivers in May", said Jefferies bank on Friday. Moreover, news out that Russian Federation has shied away from committing to extend oil production cuts along with OPEC could also weigh adversely on crude prices if this risk materializes.

Earlier this week, the Energy Information Administration reported that USA crude inventories rose to their highest level since November 2017.

On a less-brighter note, the World Trade Organization recently slashed its estimates for 2019 economic growth by a staggering 1.1 percent.

The monthly oil market report for April said that the reality is different according to direct communication, with Angola producing 50,000 fewer bpd to 1.373 million bpd in March. The producers are due to meet on June 25-26 to decide whether to extend the pact.

Province Plans Path to Balanced Books in 2019 Budget
And as the next election comes into view, the temptation to spend a lot more - or lure voters with big tax cuts - will only grow. They say they inherited a $15 billion deficit from the previous Liberal government that has since been cut to $11.7 billion.

USA energy companies this week increased the number of oil rigs operating for a second week in a row, bringing the total count to 833, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday. OECD oil stocks fell by 21.7 mb on the month in February after three months of increases.

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

Oil prices at $70 per barrel and higher increase the risk of slowing demand growth against the backdrop of uncertainties in global economy, International Energy Agency said in its Oil Market Report.

Venezuela is an OPEC member but exempt from the cuts as it struggles with political turmoil, sanctions and repeated power blackouts.

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