Commodities: Oil industry news
The oil industry is crucial for the global economy. Climate change and regulations will reduce the amount of oil used by the countries in the future. However, at the moment this is a profitable business. It is important to remember that for several countries the oil industry is one of the primary sources of income. It means that every time oil prices start to decrease this might indicate a serious issue for the oil-producing states. Read more about Oil Industry.
Oil prices fell on Thursday. The price of Brent crude decreased by 31 cents or 0.5% to $60.18 a barrel. The price of U.S. crude fell by 18 cents or 0.3% to $55.60 a barrel. This was the first time when oil prices decreased for the last three days.
A widely covered trade war between the U.S. and China affected the commodities, and the oil industry is not an exception.
Oil industry update
Falling oil prices is not the only news connected with the oil industry. There is other interesting news as well. For example. Chinese authorities announced that China was buying Iranian oil.
According to Chinese customs officials, China imported 926.119 barrels per day from Iran. This means that Iran exported nearly 1 million barrels per day in July. For instance, Saudi Arabia in July exported 1.65 million barrels per day to China. Due to the sanctions imposed on Iran, the amount of oil is not a bad result.
Read more about Oil Industry.
The Iranian economy is struggling to deal with the problems created by the tensions with the U.S. In this situation cooperation with is China is crucial for the local economy.
American bank Morgan Stanley decided to lower the oil price forecasts until 2020. According to this forecast, the price of Brent crude will be $60.
It means that Morgan Stanley lowered the Brent crude oil price from $65 to $60. The price of another benchmark, which is the West Texas Intermediate (WTI), will also decline from $58 to $55.
Morgan Stanley analysts think that there are several factors that will affect oil prices. Global economic problems, falling demand for oil and shale oil production are the major contributing factors.
The investment bank also touched another issue, which is the oil demand growth. Morgan Stanley lowered the growth demand outlook from 1 million BPD to 800,000 BPD for 2019. Also, the bank made a similar decision about the next year. It reduced the demand growth outlook for 2020 from 1.4 million BPD to 1 million BPD.
Morgan Stanley is not alone when it comes to the negative assessment. Another investment bank Barclays also lowered the oil price forecasts until the end of 2019. They did the same for 2020.
BP and Alaska
British Petroleum (BP) decided to sell its business in Alaska. According to the agreement, they will sell its Alaskan business to Hilcorp Energy Co for $5.6 billion.
Interesting part of the deal is that it includes the largest oil field in North America. The name of this place is the Prudhoe Bay oil field. Hilcorp is also going to buy BP’s stake in the Trans-Alaskan Pipeline.
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