What does oil say about the world economy in 2019?

The forces that pushed oil sharply at the end of 2018 will not disappear. US crude oil prices have fallen 40% since hitting their highest level in four years above $ 76 a barrel in October. Brent, the world benchmark, fell this week to its lowest level since August 2017. Oil is one of the most important pillars of future economic growth, and the volatility of land prices in recent days reflects global stock markets. The continued downward pressure on oil prices reflects concerns about rising US production and weak global economy. Even OPEC and its partner countries have not been able to reverse production. The dynamic could be innocent 2019. Global slowdown The IMF economists expect global growth to slow to 2.5% next year from 2.9% in 2018. Low economic activity means lower demand for energy products. The International Energy Agency warned of “relatively weak” demand in Europe and developed Asian countries. He also noted a “slowdown” in demand in India, Brazil and Argentina due to weak currencies. OPEC warned this month that demand for its oil next year would be about 1 million bpd less than 2018. “The dominant factor on the demand side will be the economic outlook,” said energy analyst Robin Mills. . “It will get some support from low oil prices but it is generally likely that the global economy will slow down.” OPEC, Russia, OPEC and its allies agreed earlier in December to remove 1.2 million bpd from world markets. Cartel members pledged to cut production by 800,000 bpd for six months, starting in January. Russia and other partners have promised to cut an additional 400,000 barrels a day. An agreement has led to higher prices, but their impact has been halted within days. The price of oil can determine what happens when the agreement ends in June. “If the price remains below $ 60 a barrel, it will expect OPEC to seek to extend the December agreement,” Ross said of the online investment platform AG Bell. “If it is back towards $ 80 a barrel, it may look to increase production again.” Qatar withdraws from OPEC to focus on Iranian gas concessions US surprised investors in November when eight countries granted temporary sanctions for exemptions allowing them to buy from Iran without fear of punishment. Exemptions expire in May and it is not clear whether they will be extended. What happens next is “very difficult to predict, because the US has only almost completely transformed Iran’s policy,” said Spencer Welch, executive director of oil markets at IHS Markit. “The United States does not want the price of gasoline to rise, so it is likely that US policy will be affected by what the market is doing and which will be affected by the effectiveness of the OPEC cut,” he said. The US oil boom The United States became the world’s largest crude oil producer in September, surpassing Russia and Saudi Arabia for the first time since 1973. This achievement shows how the US rocky oil boom reshaped the global energy landscape. US oil production has more than doubled over the past decade. But raised questions about OPEC’s ability to influence prices


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