Baku, Azerbaijan, July 3
By Leman Zeynalova – Trend:
Oil market will have a tight supply-demand balance for the remainder of 2019, said Ann-Louise Hittle, vice president, Macro Oils, at global natural resources consultancy Wood Mackenzie, Trend reports.
She was commenting on the recent decision of OPEC+ to extend the oil output cut deal.
“The impact on oil prices has been limited, with prices rising slightly on 1 July. They dipped today, but rose again on rumours of a potential US attack on Iran. As the US stand-off with Iran continues, so will speculation. This will have a varying effect on oil prices, depending on how tightly balanced the market is at the time,” said Hittle.
She pointed out that Wood Mackenzie expects continued production restraint at current levels through 2020 to offset the impact of strong non-OPEC supply growth.
For 2019, this results in a tight balance between supply and demand in the remainder of 2019 because of the impact of US oil sanctions on Iran and Venezuela, added the Wood Mackenzie expert.
“We forecast Brent to average $68 per barrel for 2019 as a whole, and $69.50/b in the second half of 2019. “The agreement will help balance the market as 2020 starts. This will allow OPEC+ to decide whether to continue production restraint for the rest of the year, or to adjust quotas. The next ordinary meeting on 5 December 2019 allows the group a chance to reassess 2020 fundamentals,” she said.
The 176th Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) was held in Vienna, Austria, on 1 July 2019. In view of the current fundamentals and the consensus view on the outlook for the remainder of 2019, the Conference decided to extend the voluntary production adjustments agreed at the 175th Meeting of the OPEC Conference for an additional period of nine months from 01 July 2019 to 31 March 2020.
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