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Petrochemical Industry Weekly: Fears Of A Supply Glut Have Exacerbated The Decline In Oil Prices

Zhangjiagang Sansu Machine Co.,Ltd | Updated: Dec 05, 2018

WTI crude and brent both fell last week, with WTI futures ending the week down 10.70% at $50.42. Brent crude closed at $58.80, down 11.92 percent for the week. The plunge was driven by concerns about rising supplies of crude oil, and fears of a supply glut continue to mount. On the supply side, U.S. crude oil inventories rose for a ninth straight week, the longest streak since March 2017, while production remained at record highs. Meanwhile, Saudi Arabia produced more than 10.7 million barrels a day of crude oil in November, which means Saudi Arabia's production this month will surpass the record set before the 2016 OPEC+ combined production cut. On the demand side,OPEC, EIA and IEA lowered their crude oil demand growth forecast for this year and next. In their monthly report,OPEC predicted that oil demand to OPEC in 2019 would be 31.5 million barrels per day, which is half a million barrels per day less than the forecast two months ago and 1.4 million barrels per day less than the current production. EIA think global oil demand growth in 2018 is expected to drop by 60000 BPD to 1.52 million BPD, the IEA monthly report for 2018 and 2019, global oil demand growth forecasts unchanged, respectively, 1.3 million barrels a day and 1.4 million barrels a day at the same time, demand for OPEC crude oil will be 2019 forecast cut 300000 barrels per day to 31.3 million barrels a day, 1.7 million barrels a day lower than the current production. Saudi oil production hit a record high, adding to fresh concerns about a glut in U.S. crude inventories, and the OPEC summit in Vienna on Dec. 6 could be the key to oil prices in 2019.