IEA Reveals a Big Surprise for Oil Bulls

Crude oil

A meeting between President Donald Trump and President Xi Jinping to sign an agreement to end their trade war won't occur this month and is more likely to happen in April at the earliest, three people familiar with the matter said.

Wednesday's weekly EIA report for the week-ending March 8 showed US commercial crude oil inventories fell as refineries hiked output.

Oil prices have risen since the beginning of this year thanks to supply cuts led by OPEC.

In a bid to force Maduro to leave office, the United States slapped sanctions on Venezuela and its national oil industry in January, blocking exports of its oil to U.S. customers.

United States crude oil demand in 2019 is expected to rise by 360,000 barrels to 20.81 million barrels per day, a former Energy Information Administration (EIA) for an increase of 350,000 barrels per day.

The U.S. bank said January global crude oil demand growth was "nearly 2.0 million barrels per day, with strength visible in both emerging markets and developed economies". This translates to a serious weakening of both Russian Federation and Saudi Arabia's hands in terms of dominating both production and global oil prices.


A recent EIA forecast also showed that the United States would become a net exporter of crude oil and petroleum products on a monthly basis in 2019 and on an annual basis in 2020. We will observe the economic-political consequences of the USA cornering Saudi Arabia, Iran and Venezuela in the global oil game. But the agency said there are a number of factors that could blunt the i the loss of Venezuelan oil on the global oil market.

On the imports side, EIA said that most of the reduction in USA petroleum imports was of light, sweet crude oil, as those barrels were replaced by domestic production of a similar quality. 'This highlights the continued shared responsibility of all participating producing countries to avoid a relapse of the imbalance and continue to support oil-market stability in 2019. Moreover, because of the fall in United States crude oil production, the Brent-WTI spread might have contracted more than $1 in the trailing week.

"Much of this spare capacity is composed of crude oil similar in quality to Venezuela's exports", said the agency.

US crude ended the week 4.1 percent higher, and Brent was up 1.9 percent.

In a monthly report, the Organization of the Petroleum Exporting Countries said 2019 demand for its crude would average 30.46 million barrels per day, 130,000 bpd less than forecast last month and below what it is now producing. Production in Iran and Libya, also exempt, was little changed.

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