WTI Oil: Economic Concerns Weigh on Oil Prices

WTI OIL – US West Texas Intermediate oil slipped down, along with Brent Crude oil, on Friday as economic concerns weighed down on sentiment.  This halted a three-day rally that was spurred by OPEC-driven efforts to cut supplies as well as US-imposed sanctions against Iran and Venezuela.

WTI oil futures traded at $59.84 per barrel, down 14 cents or 0.2 percent from their last settlement. Meanwhile, Brent Crude oil futures stood at $67.72 per barrel, also down 14 cents or 0.2 percent from their last trading session.

Just a day ago, Brent reached a four-month high, clocking in $68.69 per barrel.

Oil prices have been supported by the supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), along with non-affiliated allies like Russia, commonly referred to as OPEC+.

Economic growth has been sluggish all over the world, including North America, Europe, and Asia.

“Global economic growth still remains a concern,” said a director from an energy consultancy.

According to a Canadian investment bank, oil was “still below the fiscal breakeven level in a number of OPEC countries.” This indicates that more producers have inkling to prop up prices.

“With the driver of the OPEC bus, Saudi Arabia, showing no signs of wavering in the face of renewed pressure from Washington, we believe that OPEC is likely to extend the deal for the duration of 2019 when they next assemble in Vienna in June.”

Outside OPEC Cuts

The production in Venezuela has also suffered from the US sanctions, aggravated by internal political and economic crisis. It experienced a huge plunge from 3 million barrels per day in the 2000s to barely more than 1 million barrels per day at present.

Meanwhile, Iranian crude shipments were also down, clocking in only 1 million barrels per day in March from 1.3 million barrels per day in February. It reached a 2018 peak of at least 2.5 million barrels per day in last April.

In the US, production has jumped to a record 12.1 million barrels per day, putting it at the top spot as the world’s biggest oil producer, topping Saudi Arabia and Russia.

The International Energy Agency (EIA) sees the United States poised to become a net crude oil exporter in 2021.