Oil Price Tied to Non-OPEC Supply Concerns, Lower Demand
Crude Oil Talking Points:
- Three top oil forecasting agencies have highlighted non-OPEC supply as a downward pressure
- Despite an OPEC cut, supply should remain considerable despite US sanctions on Iran and Venezuela
- Supply glut comes as crude demand questioned
Crude Oil Price Outlook – Fundamental
West Texas Intermediate (WTI) crude oil posted solid gains last week, climbing from roughly $52.60 to close Friday around $55.20. While the week helped the broader effort to rebound from the precipitous decline that started in October, crude has slowed its ascent considerably from earlier in the year. With that said, last week’s gains were posted amid a bearish report from the IEA that warned of considerable production capacity from non-OPEC members.
The report echoed warnings from the EIA and OPEC, also closely watched crude forecasting agencies. With all three sounding off on a seemingly bearish development, the outlook for the week ahead will reflect as such.
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Crude’s price may see compounded pressure as the outlook for fuel demand is called into question amid global growth concerns. Both the IEA and EIA have forecasted a decrease in crude demand for 2019 while OPEC envisions no change from 2018. Barring further OPEC cuts or a surprise fundamental development, crude looks to remain pressured.