Oil Prices Slump, Global Supply Falls by Half Daily
Amidst uncertainties in demand following the United States (U.S) debt ceiling debate, crude oil prices are on course for a fourth weekly drop amid economic jitters and signs of increased supplies.
Today, Brent crude oil edges down 0.3% to $74.77, down 0.7% for the week. Reports that a pipeline linking northern Iraq and Turkey would resume flows on Saturday after being shuttered for over a month because of a legal dispute–pushed prices lower on Friday.
According to ING, the reopening could see around 450,000 barrels of oil a day return to the market. Meanwhile, economic worries have hung over oil this week.
“Most of the commodities complex came under pressure due to lingering banking concerns, worries over the U.S. debt ceiling, and questions growing over how strong a Chinese recovery we are seeing,” the Dutch bank says in a note.
Global oil supply fell month-on-month by 500,000 barrels per day (bpd) in April, averaging 101.3 million bpd, according to the Organization of Petroleum Exporting Countries (OPEC) most recent monthly oil market report on Thursday.
Secondary sources showed that total crude oil production from the 13 member countries of the OPEC group, or OPEC-13, averaged 28.60 million bpd in April, 191,000 bpd lower than the previous month.
Crude oil output increased mainly in Saudi Arabia, Angola, and Iran, while production in Iraq and Nigeria declined by 203,000 bpd and 170,000 bpd, respectively.
Production in Saudi Arabia rose by 95,000 bpd, followed by 79,000 bpd in Angola. The share of OPEC crude oil in total global production remained unchanged at 28.2% in April. Meanwhile, the global rig count totaled 1,889 in April, a reduction of 65 from March, while OPEC countries accounted for 420 rigs.
Oil demand growth forecast remains unchanged for 2023
OPEC kept its forecast for global oil demand growth unchanged for 2023. The group predicts that oil demand will increase by 2.3 million bpd in 2023 to reach 101.9 million bpd.
‘Minor upward adjustments were made due to the better-than-expected performance in China’s economy, while other regions are expected to see slight declines, due to economic challenges that are likely to weigh on oil demand,’ OPEC said.
‘However, this forecast is subject to many uncertainties, including global economic developments and ongoing geopolitical tensions,’ OPEC added. #Oil Prices Slump, Global Supply Falls by Half Daily
