Oil dips on global growth worry, possible output rise

Published 10-APR-2019 09:50 A.M.

|

2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

Oil fell from five-month highs on Tuesday after the International Monetary Fund cut its global economic growth forecasts and as Russia signalled it may retreat from its production-cutting deal with OPEC.

A threat by Washington to slap tariffs on hundreds of European goods halted a rally in global equities, which also dragged on oil futures.

Brent settled 49 cents lower at $70.61 a barrel, after hitting $71.34, its highest since November. US crude ended at $63.98 a barrel, down 42 cents on the day, after also reaching a five-month high of $64.79.

"I think the IMF lowering global growth is really the biggest headwind today that oil futures are seeing," said Phil Streible, senior commodities strategist at RJO Futures in Chicago.

The IMF cut its global economic growth forecasts for 2019 and warned growth could slow further due to trade tensions and a potentially disorderly British exit from the European Union.

The IMF downgrade, its third since October, added to concerns a slowdown this year will hit fuel consumption and prevent crude prices from rising even higher.

Prices also faltered as Russia, a participant in the OPEC-led supply cuts that expire in June, signalled on Monday it wants to raise output when it next meets with OPEC because of falling stockpiles.

On Tuesday, President Vladimir Putin said Russia did not support an uncontrollable rise in oil prices and that the current price suited Moscow.

"We are ready for cooperation with OPEC in decision-making ... But whether it would be cuts, or just a stoppage at the current level of output, I am not ready to say," Putin told an Arctic conference in St. Petersburg.

US sanctions on Iran and Venezuela have deepened the OPEC supply cut and concern has grown this week about the stability of Libyan output. The OPEC member pumps around 1.1 million barrels per day, just over 1% of global supply.

Rising US crude production and inventories continued to weigh on the market.

US crude production was expected to rise 1.43 million bpd in 2019 to average 12.49 million bpd, the US Energy Information Administration (EIA) said on Tuesday, up from its previous forecast for a rise of 1.35 million bpd.

US crude inventories rose by 4.1 million barrels last week, compared with analysts' expectations for an increase of 2.3 million barrels, data from industry group the American Petroleum Institute showed after prices settled.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.3 million barrels, API said.

The Energy Information Administration releases its oil data on Wednesday.

Laila Kearney. Additional reporting by Alex Lawler in London and Henning Gloystein Singapore

tags

GAS OIL


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free

X