By Srinivas Chowdary Sunkara // petrobazaar // 12th February, 2019.
OPEC released its monthly oil market report (MOMR) for the month of February, 2019. The report says that the crude oil prices rebounded in January with a spike of above 3% buoyed by robust fundamentals with signs of tightening supplies and firm demand from Asia pacific.
This report underlined the slowing economic growth from U.S to China considering the ongoing trade tensions, monetary policies and several underlying challenges in emerging and developing nations. The estimate for world oil demand growth was slightly revised down by 0.05mb/d from previous month's 1.47 mb/d to 1.24mb/d to reach an average of 100 mb/d. The downward revision is mainly due to an expected lower outcome from OECD Americas, Europe, Latin America and the Middle East. This report clearly stated that OPEC allies cut down production to 30.81 mb/d while non-OPEC supply growth forecast is revised up by 0.08 mb/d to 2.18 mb/d to average at 64.34 mb/d due to revised production forecast for the US Gulf of Mexico.
Significant production cuts by OPEC + could soothe the ears of Oil markets but the bearish bells are ringing on the other side by non-OPEC suppliers. Slower economic growth and trade wars indicates the faltering of demand in the long term. Brent contango structure flattened while WTI structure remained in significant contango, reflecting the U.S fundamentals.
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