Economy

Global oil supply to swamp demand in 2019 despite output cuts - IEA

Global oil supply to swamp demand in 2019 despite output cuts - IEA”

International Brent crude futures were up 1 percent, or 65 cents, at $63.07 per barrel.

The global oil market will struggle this year to absorb fast-growing crude supply from outside the Organization of the Petroleum Exporting Countries (OPEC), even with the group's production cuts and US sanctions on Venezuela and Iran, the International Energy Agency said in a report on Wednesday. "Should oil demand growth come in line with our expectations, the greater supply losses leave risk that.spot prices rally even faster and higher than we forecast".

U.S. West Texas Intermediate (WTI) crude futures were at $54.16 per barrel at 0413 GMT, up 26 cents, or 0.5 percent, from their last settlement.

United States prices were also supported by a report from the American Petroleum Institute (API) on Tuesday showing that crude inventories fell by 998,000 barrels in the week to 8 February to 447.2 million, compared with analyst expectations for an increase of 2.7 million barrels.

But the country's oil industry has been in relative and absolute decline for the last 50 years as problems of producing and marketing its heavy crudes have been compounded by an unattractive investment regime and mismanagement.

The IEA raised its estimate of growth in crude supply from outside the Organization of the Petroleum Exporting Countries to 1.8 million bpd in 2019, from 1.6 million bpd previously.

In the report, OPEC said its oil output fell by 797,000 bpd month on month to 30.806 million bpd in January.

International Brent crude oil futures had yet to trade.

"Oil production is rapidly falling and companies that normally resell Venezuelan crude have not found ways to mitigate the effect of the USA sanctions", Barclays bank said.

Meanwhile, Barclays bank added, "Oil production is rapidly falling and companies that normally resell Venezuelan crude have not found ways to mitigate the effect of the USA sanctions".

While yesterday's jawboning from OPEC continues to keep the oil complex bid. "China trade talks, ignoring the risks now in place from the loss of Venezuelan barrels", US bank J.P. Morgan said in a weekly note.

In the US, oil inventories climbed 3.63 million barrels, while supplies of gasoline, heating oil and other fuels added about 3 million barrels more, according to weekly data from the Energy Information Administration. Analysts polled by Reuters forecast an increase of 2.7 million barrels.



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