By Udeme Akpan & Ediri Ejoh
Uncertainty continues to trail the price of crude oil in the international market as it closed, yesterday, at $60.50, $51.39 per barrel for Brent crude and West Texas Intermediate respectively.
This came as Organisation of Petroleum Exporting Countries, OPEC, puts the 2019 global economic growth at 3.5 per cent as oil price drops to $60 per barrel in the global market.
The report stated that the price of OPEC basket of 14 crudes stood at $60.50, against $59.52 a barrel on Wednesday, compared with $58.24 the previous day.
The price of oil has risen about 20 per cent from the 18-month low registered in late December, but investors appear loath to push crude much higher without evidence that relations between Washington and Beijing are improving, according to analysts.
According to BNP Paribas, Head of Commodities, Harry Tchilingurian, “Brent needs to move past $62 before we can talk about $65.
“From there, the door will be open to target $70, (if) we do not have negative news emerging around U.S.-China trade talks that caused high levels of angst and de-risking last December.”
However, in its oil market report sent to Vanguard yesterday, OPEC stated: “The global economic growth forecast remains unchanged at 3.7 percent for 2018 and 3.5 percent for 2019.
In the OECD, US growth is unchanged at 2.9 percent for 2018 and 2.6 percent for 2019. Euro-zone growth remains at 1.9 percent for 2018 and 1.7 percent for 2019.
“GDP growth in Japan was revised down slightly to 0.8 percent for 2018 and 1.0 percent for 2019. In the non-OECD countries, both India’s and China’s growth forecasts remain at 7.5 percent and 6.5 percent for 2018, respectively, and at 7.2 percent and 6.1percent, respectively, for 2019. Growth in Brazil remains unchanged at 1.1 percent for 2018 and 1.8 percent for 2019. Russia’s GDP growth forecast is also unchanged at 1.6 percent for 2018 and 1.7 percent for 2019.
“The upside to global growth is limited, with the risk remaining skewed to the downside amid ongoing trade tensions, monetary tightening and geopolitical challenges.”
It stated: “World oil demand growth is estimated at 1.50 mb/d, unchanged from last month’s report. OECD Americas continues to lead growth in the OECD region in response to strong gains for light and middle distillates throughout 2018.
“Other Asia is estimated to lead demand growth in the non-OECD, and globally, on strengthening product demand growth in India, Indonesia, Singapore and Thailand. Total oil demand is now pegged at 98.78 mb/d.
“In 2019, world oil demand is forecast to rise by 1.29 mb/d, also in line with last month’s projections. As a result, total world oil demand is projected to reach 100.08 mb/d for the year. Oil demand growth is expected to originate mainly from Other Asia, led by India, followed by China and OECD Americas.
“OECD countries are anticipated to rise by 0.25 mb/d in 2019, while non-OECD countries are projected to drive oil demand growth by adding an estimated 1.04 mb/d.”