Lower oil supply to prop up prices in next few weeks
Baku, Azerbaijan, Feb.9
By Leman Zeynalova – Trend:
Oil prices fell during the week ending on Feb.8 on a combination of a stronger US dollar, fading optimism about progress on US-China trade talks and weak German economic data, Trend reports citing the UK-based Capital Economics consulting company.
Putting a floor under prices, however, were clear signs of markedly lower production in Saudi Arabia and the disruption caused by US sanctions on Venezuela’s state oil company, PDVSA, reads a report from Capital Economics.
“We think that lower supply will prop up prices in the next few weeks, before slower growth in oil demand sends prices lower later in the year. The weekly US stocks data were also broadly positive for the market. Even though crude stocks nudged up, US product demand remained relatively strong.”
Elsewhere, the price of US natural gas fell sharply again this week on the back of weather forecasts suggesting a mild February, according to the report.
“The weekly gas storage data showed a draw of 237 billion cubic feet, which should have given prices a lift. But it was for the week when the US experienced severe cold weather and was actually less than expected.”
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