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OPEC cuts 2019 oil demand forecast on global slowdown

OPEC cuts 2019 oil demand forecast on global slowdown

USA sanctions on Iran and Venezuela, together with OPEC's output cuts, have therefore removed mostly medium and heavy oils from the market, leaving lighter grades relatively unaffected.

"Disruptions have increased with risks that Venezuela's production decline accelerates following the introduction of additional USA sanctions related to the Venezuelan oil industry", Reuters quoted the investment bank as saying.

The U.S. administration reimposed sanctions against the Islamic Republic's oil exports in November in a bid to ramp up pressure against Tehran's nuclear program, but extended waivers to eight major buyers of Iranian crude, a lot of them in Asia.

Companies added 7 oil rigs in the week to February 8, bringing the total count to 854, pointing to a further rise in United States crude production, which already stands at a record 11.9 million bpd.

U.S. West Texas Intermediate (WTI) crude oil futures were at $52.69 per barrel at 0751 GMT, up 28 cents, or 0.5 percent, from their last close.

Oil prices have remained steady near $60/bbl in London even as turmoil builds in Venezuela, as markets work through plentiful supplies accumulated previous year, the IEA said.

Further, the Energy Information Administration (EIA) said that Venezuelan output slipped to 1.22 million barrels per day.

"This report is bearish", said Phil Flynn an oil analyst at Price Futures Group in Chicago.

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"Our primary objective is to ensure that the oil market remains in balance throughout 2019 and beyond in order to build on the success of the past couple of years", the OPEC Secretary General said.

Global oil supply decreased month-on-month in January by 1.03 million barrels per day (mb/d) to average 99.32 mb/d, preliminary data of the Organization of the Petroleum Exporting Countries (OPEC) showed on Tuesday.

Brent has struggled to sustain gains this month following its best ever start to a year on concern that booming shale output will undermine cuts by OPEC and its partners, and fears that the U.S.

In the meantime, the political rift between Venezuela and the United States continues with the US sanctions against the South American nation giving prices a slight boost. Venezuela has been trying to find new customers for its oil, but many world leaders have declined to purchase from the struggling country because it would anger Trump. In quality terms, it is more complicated.

In the OECD, 2019 USA growth was revised lower to 2.5 percent, following growth of 2.9 percent in 2018, while eurozone growth was also revised down to 1.3 percent for 2019, after growth of 1.8 percent in 2018, it said.

It said OPEC crude output was 930 thousand b/d lower in January at 30.83 million b/d, hitting a almost four-year low.

OPEC is partnering with 10 non-member nations, including Russian Federation, to keep 1.2 million bpd off the market.

The recent developments in the crude oil market have all but eliminated the discount enjoyed by heavy crudes, and in some cases, physical cargoes of some heavy grades have traded at premiums to light crudes.

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