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Oil prices unlikely to rise in near term

Oil&Gas Materials 7 June 2019 09:49 (UTC +04:00)

Baku, Azerbaijan, June 7

By Leman Zeynalova – Trend:

Oil prices are expected to average $66/bbl in 2019 and $65/bbl in 2020, a slight downward revision relative to January reflecting softening global activity, Trend reports with reference to the World Bank’s (WB) Global Economic Prospects.

“The outlook remains highly uncertain and dependent on policy decisions, particularly whether the production cuts among OPEC and its partners will be extended into the second half of 2019. However, the supply cuts by OPEC members have resulted in substantial spare production capacity, which lessens the likelihood of spikes in oil prices in the near term,” said the Bank.

The report further says that crude oil prices recovered over the first half of the year, averaging $64 per barrel (bbl), supported by production cuts among OPEC and its non-OPEC partners, as well as the United States’ decision to terminate waivers for its sanctions on Iran.

“Saudi Arabia has contributed the most to the fall in supply, reducing output by 1 million barrels per day (mb/d) relative to late-2018 levels, while the Russian Federation has cut production by 0.2 mb/ d,” reads the WB report.

“In contrast, production in the United States has continued to grow, and the country maintained its position as the world’s largest oil producer. Venezuela’s crude oil output has dropped further, to about 0.8 mb/d by mid2019, from 1.4 mb/d in 2018 (IEA 2019).”

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