Goldman cuts 2019 crude price view; sees recovery from current levels

Roman Schwartz
January 9, 2019

Oil prices climbed about 3 percent on Monday, rebounding further from 1-1/2-year lows reached in December on support from OPEC production cuts and steadying equities markets.

International Brent crude futures gained 55 cents to $57.88 per barrel by 0945 GMT.

U.S. West Texas Intermediate (WTI) crude oil futures (CLc1) settled up $1.26, or 2.6 percent, at $49.78 a barrel.

Beyond politics, oil markets are being supported by supply cuts started late a year ago by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC member Russian Federation.

Apicorp noted that the cuts to production undertaken by Opec and allies may not be sufficient to balance the market, which may see build up of inventory levels, particularly as USA shale is expected to top 12 million bpd during the second half of the year.

Looming over the OPEC-led cuts, however, is a surge in US oil supply, driven by a steep rise in onshore shale oil drilling and production.

With drilling activity still high, most analysts expect U.S. oil production to rise further this year.

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They also said staff members would cross through the shower area to get from one room to another, People magazine reported. Her identity hasn't been reported , and it's not known if she has family or a guardian.

The previous day's gains for oil prices, however, were capped as Goldman Sachs cut its price forecast on worries over energy demand and the potential for a supply surplus.

Record high crude oil production has also pushed up United States inventories, which rose by almost 17 per cent in 2018 to their highest in well over a year, according to weekly data by the Energy Information Administration (EIA) on Friday.

Supporting Ritterbusch's observations was news from Genscape that USA crude inventories at Cushing, Oklahoma fell by 565,000 barrels from last Tuesday to Friday. The World Bank predicts a decline in the average price of oil in 2019 to $67 a barrel, the World Bank said in a report released on Tuesday. "When stock markets are strong oil usually follows suit", PVM Oil Associates strategist Tamas Varga said.

More upbeat equity markets also offered support on the back of expectations that trade talks set for this week between the United States and China will ease a trade dispute.

Trade tensions pose the threat of hurting demand for oil, dragging prices, which have already been battered in recent months, further down. The ongoing spat has weighed on global growth, pushing oil sharply lower in the last few months.

"Oil prices are projected to be flat, on average, during 2019-21, at $67 per barrel, potentially limiting fiscal and export revenue increases in oil-producing economies", the WB analysts say adding that the uncertainty of the forecasts is high.

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