Business

Oil Rises On OPEC-Led Supply Cuts, Showing Pullback

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| March 11 , 2019 , 12:17 IST

Saudi oil minister Khalid al-Faith lifted the price of Oil saying an end to OPEC-led supply cuts was unlikely before June and a report of falling U.S. drilling activity.

Despite this, markets were somewhat held back after U.S. employment data raised concerns that an economic slowdown in Asia and Europe was spilling into the United States, where growth has so far still been healthy.

U.S. West Texas Intermediate (WTI) crude oil futures were at $56.29 per barrel at 0156 GMT, up 22 cents, or 0.4 percent from their last close.

Brent crude futures were at $65.91 per barrel, up 17 cents, or 0.3 percent.

Oil markets have been supported this year by ongoing supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated allies like Russia - known as the OPEC+ alliance.

OPEC+ has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year to tighten markets and prop up prices. The group will meet in Vienna on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy.

According to media reports Saudi oil minister Khalid al-Falih on Sunday said: “ it would be too early to change OPEC+ output policy at the group's meeting in April.”

"We will see what happens by April if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward," Falih said.

Prices were also supported by U.S. energy services firm Baker Hughes' latest weekly report showing the number of rigs drilling for new oil production in the United States fell by nine to 834.

High drilling activity last year resulted in a more than 2 million bpd rise in production, to a record 12.1 million bpd reached this February.

"This is the third straight week of decline...after a number of oil producers trimmed their spending outlooks for 2019," ANZ bank said on Monday.

The slowdown in drilling points to more timid output growth going forward, but because the overall drilling level remains relatively high despite the recent decline, many analysts still expect U.S. crude output to rise above 13 million bpd soon.

kushal kumar

The jobs report in relation to February 2019 for the US has led to opinion in some business quarters that economic slowdown in Asia and Europe in the ongoing times seems to have spilled over to the US also. Soon after the release of the jobs data report for the US covering February in the first week of March 2019 , this Vedic astrology writer stumbled upon to read article “ The jobs report was the weakest in months - Here is why” by Columnist Patricia Cohen published on 8 March , 2019 at nytimes.com. The most striking part of the article of Patricia Cohen reads like this :- “ February’s meager gain follows other signs of economic sluggishness , while there were encouraging signs in the jobs report for February 2019. The economy’s remarkably steady job –creation machine sputtered in February and produced a mere 20 , 000 jobs. It was the smallest gain in well over a year”. This opinion suggests that economic slowdown seems to be attempting to enter the US , a sort of warning signal. Precisely relevant to the aforesaid opinion and probable questions which may arise , is this Vedic astrology writer’s yearly predictive article of 1 October , 2018 for the US - “ Astrological Probable Alerts for the US in 2019” - published on 1 November , 2018 in the monthly Webzine of Wisdom Magazine from the US at wisdom-magazine.com/Article.aspx/4897/. Here follows the related text from the said article of this writer :- “ 4 . ECONOMY IN 2019. Focus on economic health of the nation is highlighted , which will be followed by robust success. Wise trading and economic strategies are likely to play a big role , yielding dividends. ………………………Much depends upon correctness of strategies evolved and applied during the course of the year. Months of April and November -December look to be doing very well , while in other months , some amount of pressure cannot be ruled out. January – February and July look to be posing some worrisome concerns”. These predictive inputs of 1 October , 2018 look to be holding the fort , so far , say 90% correct. But it is months of April- May which may unfold the story whether the US is impacted by economic slowdown or not. Let us wait till then.