Oil: OPEC indicates market weakness
The oil market ends week mixed. Despite the fact that crude oil inventories were slightly above forecasts (2.2 million barrels versus 1.6 million), however this has contributed to some correction of quotations.
The attention of the big investors were attracted to the monthly report of OPEC – it came out not so positive for the global oil market. According to OPEC, demand for crude oil next year could decline by 1.1 million barrels per day and will be below the mining cartel in October. This assumes that a surplus in 2020 will still be reflected in the pattern of supply and demand.
OPEC believes that the demand for crude oil will amount to 29.6 million barrels per day, about 1.1 million below the expected average demand in 2019. To balance supply and demand, the cartel may need to further cut production in early December. This decision, however, to take not so simple. Further reductions will lead to increased market share from countries not members of the organization – basically, we are talking about the United States.
We are once again faced with uncertainty as to what actions ultimately will take OPEC at the beginning of next month at the meeting. In this regard, over the global oil market will be dominated by the bearish tone if the primary negative factor associated with the trade wars between the US and China, will not be resolved before the meeting.
Summarizing, we can say that oil prices in the short term will be under pressure and can complete the week with a correction to $62 a barrel and Brent to $56,40 per barrel WTI.
“International financial center”