Search DubaiPRNetwork.com

Home >> Energy and Industry

Oil Prices Hover Around Annual Average as OPEC Experiences Robust Production Declines

Wednesday, November 13, 2019/ Editor -  

Share

Home >> Energy and Industry

Oil prices are hovering near the 50-week moving average which is a proxy for 1-year. While commodity trading prices have whipsawed throughout 2019, they are well above the $45 level low and the $66.5 highs. In early November, Saudi Aramco finally announced its initial public offering and is expected to go on a multi-week road show describing its long-term goals. Saudi Arabia also needs to contend with the United States which is a major global oil producer.

OPEC countries are expected to produce nearly 28.2 million barrels a day of crude oil according to the Energy Information Administration. This number is down 1.6 million barrels a day from August. Production has been on the decline making the September numbers the lowest level of OPEC production seen in 16-years.

Iran and Venezuela Lead Production Declines

The decline comes as a result of the disruptions in Saudi Arabia. The September figures from the EIA are down 4.0 million barrels a day year over year. Most of the decline in OPEC crude oil production during the past year was primarily the result of falling production in Iran and Venezuela as well as the recent disruption in Saudi Arabia. However, EIA estimates that Saudi Arabia’s crude oil production returned to pre-outage levels as of October 3.

US Crude Oil Production Eases

US oil production has been robust for most of 2019. The EIA pegs the average production in July at 11.8 million barrels a day slightly down from June. The weekly EIA numbers show production levels surpassing the 12.0 million barrel a day level

EIA reported that US crude oil production was unchanged during the first seven months of 2019 because of disruptions to Gulf of Mexico platforms. The slowing rate of growth in tight oil production reflects relatively flat crude oil price levels. Going forward the EIA forecasts U.S. crude oil production will average 12.3 million b/d in 2019, up 1.3 million from the 2018 level, and will rise by 0.9 million barrels a day in 2020 to an annual average of 13.2 million barrels a day.

Production will begin to be offset by strong demand for winter fuels in the United States. The EIA forecasts that average household expenditures for home heating fuels will decrease slightly but this is due to warmer expected winter temperatures compared with last winter. The heating season has just begun, and the weather is forecast to be colder than normal during the first 3-weeks of November.

Prices are Forecast to Remain Slide

The term structure of crude oil shows that traders believe that the price of crude oil will decline over the next year. The December 202 contract is lower than the December 2019 crude oil contract which is referred to as backwardation. This means that spot prices are higher than deferred prices. This occurs when current demand is higher than future demand.


Previous in Energy and Industry

Next in Energy and Industry


Home >> Energy and Industry Section

Latest Press Release

Face Shields Now Required for Cebu Pacific Passengers

Malabar Gold & Diamonds Opens 2 New Showrooms as Part of Its Global Expansion Pl ...

SEHA Extends Operating Hours for Specialities in Demand

New Month, New Goals

Four UAE startups among the 12 Fintech Companies Selected for Village Capital's ...

Up to €500,000 to Support the Most Promising Innovators: The Agrofood BIC Accele ...

Emirates Glass Emicool Sun T Series Leads Way as the Most Preferred Coating Opti ...

Sedar Global's Top Tips For Designing And Decorating A Kid's Space

Back to Back Monuments on the Horizon for UAE Team Emirates With Milano-sanremo ...

Jaguar Land Rover Teaches Driverless Cars How to Reduce Motion Sickness

Dubai International Academy Announces 99% Passing Rate for MYP Certificate

Kia Motors Collects Over 2,000 Pairs of Football Boots via UEFA Europa League Tr ...

Pre-Orders for Samsung's Galaxy Note20 and Galaxy Note20 Ultra Now Open in the U ...

Etihad Airways Reports Strong Start to 2020 With Second Quarter Heavily Impacted ...

HONOR 2020 H1 Business Achievements in International Markets

National Geographic Abu Dhabi Launches Sharkfest 2020 on 5th August 2020 at 9 Pm ...

Samsung Launches Galaxy Watch3 and Galaxy Buds Live

Make Up for Ever Introduces for the First Time Its New Active Care-in-foundation ...

UPS Releases 2Q 2020 Earnings

The Last Few Weeks of Dubai Shopping Mall Group's Summer Promotion