The surprisingly bullish sentiment in the latest report of OPEC nations pushed oil prices higher this Friday’s trading. The Organization of Petroleum Exporting Countries’ latest report also hints potential supply curbs from the members in the future.
Today, West Texas Intermediate futures or WTI crude rose 0.39% or 0.22 points in trading sessions. WTI crude barrel prices climbed from $56.77 from its previous close to $56.9 9 this Friday.
The news from the OPEC nations boosts WTI crude prices from $56.84 to as high as $57.12 in sessions.
Meanwhile, Brent oil contract gained 0.32% or 0.20 points in today’s trading sessions. Brent oil prices are currently at $62.48, jumping higher from its last performance of $62.28.
Brent oil contract’s run this Friday saw levels from $62.45 to $62.62, still better than its last close.
Before the much-awaited meeting of the OPEC nations in December, the 14-member bloc released its last report yesterday.
The oil-producing powerhouses now estimate that demand for its products in 2020 will decline by 1.1 million bpd from this year. The report gave life to bullish oil and petroleum traders who then took the opportunity to gain altitude in today’s trading.
The new projections will also be below the group’s output figures from last month. This suggests that OPEC’s production supply will continue to exceed demand in 2020.
In the monthly oil market report, the group said that demand for 2020 will go down to 29.6 million bpd. This 2019’s demand for OPEC nations crude is at 30.7 million bpd, 900,000 bpd lower than 2018 demands.
The continuous decline in crude oil demand is linked to various fundamentals such as calls to shift to other energy sources. Another factor is the slowing global economy brought by the United States-China trade war.
Growing US Production
While the United States is not a member of the OPEC nations, the country’s crude production is seen growing. Just recently, the Energy Information Administration said that US oil inventories’ stockpiles rose again.
The report showed a buildup of 2.2 million barrels for the week ending on November 8. The figures surpassed expectations of 1.65 million barrels buildup by experts.
US gasoline inventories also rose by 1.9 million barrels in the same week. This also topped expectations of a drop by 1.17 million barrels.
American distillate stockpiles, on the other hand, went down about 2.5 million barrels according to the EIA. This also greatly exceeded forecasts of 950,000 barrels.
The growing production and slowing demand, both in the US and other countries are prompting OPEC nations to curb supply.
Resignation from the Bloc
Just recently, Kuwait’s Prime Minister, Sheikh Jaber Al Mubarak Al Sabah, submitted his resignation for his post. The Prime Minister tendered his letter to the country’s highest ruling family, the House of Al Sabah.
Oil Ministers that are part of the group were shocked as the PM’s resignation came ahead of the December meeting. As the government will face reshuffling, it is unknown whether the current Oil Minister will stay in his post.
Kuwait’s Oil Minister Khaled Al-Fadhel is only just 11 months in his term since appointed in December of last year. Al-Fadhel, along with three other ministers, rose to power when the government reshuffled the system.
Kuwait is currently the fourth-largest producer of crude in the 14-member OPEC nations.