Venezuela’s falling oil supply is a major ‘challenge’ to global energy markets

Crude oil

The West Texas Intermediate for April delivery rose 0.35 USA dollar to settle at 58.61 dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery decreased 0.32 dollar to close at 67.23 dollars a barrel on the London ICE Futures Exchange.

Along with this, the cuts in pumping implemented by the Organization of Petroleum Exporting Countries (OPEC) and some large producers outside that group, as well as the increase in the crude extraction in the United States, influenced the prices of the so-called black gold.

Speaking about Azerbaijan oil production indicators Azerbaijan exported 5.78 million tons of oil in January-February 2019, which is 58 percent more than in two months of past year, Trend reports with reference to the State Customs Committee of the country on Friday.

"The relentless pace continues into 2019, when USA supply is expected to expand by 1.5 million bpd and account for 83 percent of non-OPEC growth of 1.8 million bpd", it said. Opec sources have said an extension of the pact is the likely scenario. OPEC announced in December it would be cutting production by 1.2 million bpd in 2019 to help balance the market in the near term.

Investors will be watching to see if OPEC sticks to its production cut agreements and maintains its demand outlook in coming quarters. That amounts to 105 percent compliance with pledged cuts, according to a Reuters calculation, up from January's rate.




The OPEC decline in February comes after the cartels' production in January fell by 797,000 barrels per day to average almost 30.8 million barrels per day. Production in Iran and Libya, also exempt, was little changed.

While Friday put an end to crude's daily winning streak due to a return of fears that the global economy will weaken and American production is skyrocketing, USA oil ended the week 4.1 percent higher, and Brent was up 1.9 percent. "Total demand is projected to exceed 100 million barrels per day during the second half of 2019", the report said. That reflects a US supply growth rate of 1.8 million barrels a day (up 10.8%) year over year.

The instability in Venezuela and the growing evidence of a slowdown in United States shale have pushed prices up.

By 15:07 GMT, the crude Brent for the world benchmark was $ 67.22 a barrel, an increase of 55 cents or 0.82 percent over the previous closing. WTI hit a high of $58.48 a barrel on Wednesday, the highest since November 13.

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