Publicado: Mar, Enero 22, 2019
Financiera | Por Marilu Caballero

Oil edges down as slowing China economy undermines markets

Oil edges down as slowing China economy undermines markets

Thanks to the booming domestic production, the imports of crude oil and petroleum products have been diminishing in recent years.

Oil prices jumped about 3 percent on Friday, rising after OPEC detailed specifics on its production-cut activity to reduce world supply, and on signals of progress in resolving the US-China trade war.

The International Energy Agency maintained its outlook for an acceleration in global demand growth this year as lower prices offset the economic slowdown.

On Tuesday, China's National Development and Reform Commission gave support to crude oil prices when they spoke about adding more fiscal stimulus.

In 2020, EIA expects oil production to increase by 1.7 million b/d because of production growth in the United States, Canada, Brazil, and Russian Federation, while overall OPEC crude oil production is expected to remain flat.

Continuously rising USA shale production will make the United States a net exporter of crude oil and petroleum products in the fourth quarter of 2020, the EIA said in its January Short-Term Energy Outlook (STEO), which offered a first glimpse into the administration's forecasts for 2020.

That said, it's undeniable that crude's performance so far in 2019 is a far cry from the steep price plunges experienced in the closing months of 2018, a point not lost on Bloomberg, which on Friday noted that the commodity hasn't started off this strong since the turn of the century.

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Since the beginning of 2017, the implementation of the agreement on the reduction of oil production has reached a level of 116%, the organization said in a report.

But oil prices collapsed in November as USA production set a new record, waivers were granted for Iranian exports and growth in China - the world's second-largest oil consumer - showed signs of slowing.

The US could soon overtake Saudi Arabia in the production of crude oil which is now at peak capacity.

Attempts by Opec states and other aligned producers to "rebalance" the market by slowing the rise in global stockpiles may deliver only gradual results, the Paris-based agency said.

The IEA, which coordinates the energy policies of industrial nations, said it was keeping its estimate of oil demand growth for this year unchanged at 1.4 million barrels per day, close to 2018 levels.

OPEC along with other producers including Russian Federation agreed past year to output cuts effective January 1 to avert a glut.

The West Texas Intermediate for February delivery declined 0.24 US dollar to settle at 52.07 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery decreased 0.14 dollar to close at 61.18 dollars a barrel on the London ICE Futures Exchange. "The US, which is already the largest liquids producer, will become at the beginning of 2019 the largest crude oil producer before Russian Federation and Saudi Arabia thanks to its unconventional crudes". "Confidence is weakening in several major economies", said the report. EIA forecasts global oil demand to grow by 1.5 million b/d in 2019 and in 2020.

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