Oil price TUMBLES: Crude falls as concern grows over weakening United States demand

2019 US Oil Output to Average 12MM Barrels Per Day

2019 US Oil Output to Average 12MM Barrels Per Day

Sub-US$100 oil prices have reduced returns from New Zealand's oil and gas sector, but crude and petroleum exports still brought in $1.06 billion in the year through November, 36 per cent more than a year earlier, according to Statistics NZ.

Still, the agency kept its estimate of oil demand growth unchanged and close to 2018 levels at 1.4 million bpd, which some market participants took as a sign of supporting oil prices.

Oil prices edged lower on Monday, echoing a weaker tone on global stock markets after evidence that economic growth in China, the world's second-largest crude consumer, eased in 2018. International Brent crude oil futures were up 62 cents, or 1.01 percent, at $61.80 per barrel at 0955 GMT.

"By the middle of the year, US crude output will probably be more than the capacity of either Saudi Arabia or Russia", CNBC cited the statement as saying.

The International Energy Agency's (IEA) monthly report came with stronger oil demand this year compared with 2018, despite the expected economic slowdown amid concerns over economic growth in China and the US.

According to data by the Joint Organisations Data Initiative (JODI) database, which collects self-reported figures from 114 countries, Saudi Arabia's crude oil exports hit a 24-month high, while crude oil production surged to an all-time high of 11.09 million bpd in November.

More importantly, Brent's six-month calendar spread has strengthened from a contango (discount) of nearly $1.80 per barrel to just 35 cents over the same period.

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Since the EIA report is positively correlated with API, the market will be trading crude oil with a bullish sentiment.

Oil is still about 20 percent above the lows reached in late December, but analysts said Brent has been trading in the low $60s and US crude in the low $50s due to ongoing nervousness about relations between Washington and Beijing and China's economic outlook.

He said factors such as rising US production and its trade dispute with China would cap price gains, "negating much of the benefits from the OPEC+ pact".

In the US, oil hasn't started off this strong in 18 years.

Iran registered the third-largest decline in output, also involuntary, as USA sanctions that started in November discouraged companies from buying its oil.

The World Bank expects oil prices to average $67 a barrel this year and next, down $2 com-pared to projections from June last year. Refinery utilization rates fell by 1.5 percentage points.

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