Oil producer group OPEC on Monday scrapped its planned meeting in April and will decide instead whether to extend output cuts in June, once the market has assessed the impact of U.S. sanctions on Iran and the crisis in Venezuela.
A ministerial panel of OPEC and its allies recommended that they cancel the extraordinary meeting scheduled for April 17-18 and hold the next regular talks on June 25-26.
The energy minister of OPEC’s de facto leader, Saudi Arabia, said the market was looking oversupplied until the end of the year but that April would be too early for any decision on output policy.
“The consensus we heard… is that April will be premature to make any production decision for the second half,” the Saudi minister, Khalid al-Falih, said.
Meanwhile, oil prices crashed yesterday on concerns that a global economic downturn may dent fuel consumption. Brent crude oil futures were at $67.03 per barrel down 13 cents, or 0.2 per cent, from their last close, but not far off the $68.14 per barrel 2019-high reached last week.
The US West Texas Intermediate WTI, futures were at $58.37 per barrel, down 15 cents, or 0.3 per cent, from their last settlement, and also not far off their 2019-high of $58.95 from the previous week.
However, crude markets remain broadly supported by supply cuts led by producer group OPEC and by aggressive sanctions by the United States against Iran and Venezuela.
“The greatest downside risk to our oil price view is demand weakness on slower economic growth. Our base case is that global oil demand will increase by 1.3 million barrels per day (bpd) in 2019. A synchronised global slowdown in growth could push global demand growth to below 1 million bpd,” analysts at Bernstein Energy said on Monday.
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