Global fuel market: still many uncertainties in both demand and supply

Global fuel market: still many uncertainties in both demand and supply

U.S. West Texas Intermediate (WTI) crude futures were at $53.70 per barrel, down 0.1 percent, or 4 cents. However, U.S. crude oil production C-OUT-T-EIA rose by more than 2 million bpd in 2018, to a record 11.9 million bpd.

The decline in Venezuelan production has also slowed, while more growth is expected in the USA where liquids production increased by an "incredible and unexpected" 2.1 million barrels a day in 2018, the IEA said. US crude futures fell $1.00 to $51.31 a barrel, off 1.9 percent. After closing out 2018 in free-fall, USA crude prices have rebounded more than 18 percent to start this year.

The International Energy Agency said on Friday that USA oil production growth combined with a slowing global economy would put oil prices under pressure.

EIA expects growth in liquid fuels production in the United States and in other countries not part of the Organization of the Petroleum Exporting Countries (OPEC) will contribute to global oil inventory growth rates of 0.2 million b/d in 2019 and 0.4 million b/d in 2020.

Global oil supply fell by 950 thousand barrels per day (kb/d) in December, led by lower OPEC output with 100.6 million barrels per day (mb/d) ahead of new supply cuts, according to data of the International Energy Agency (IEA) on Friday.

Crude has held on to its rally above $50 a barrel for over a week, rebounding more than 20 percent from a low on December 24. March Brent was recently trading at US$62.58.

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The IEA also reported that U.S. oil output will rise by 1.3 million bpd in 2019, though S&P Global Platts reported United States oil rigs dropping for the ninth consecutive week when Brent prices fell below $70 per barrel in mid-November 2018.

The U.S. crude output could soon challenge the market share of Saudi Arabia and Russian Federation, the International Energy Agency (IEA) said. That's an area that of course attract a lot of attention but we are also in the process of building an inverse head and shoulders, which could measure for a move to the $66 area.

Earlier in the week, Saudi Energy Minister Khalid Al-Falih said he's confident the cuts will have a "strong impact" on the market.

Despite renewed hopes that a trade deal could be reached between the USA and China by the March 2 deadline, it may still not be enough to offset the negative impact on China's economic growth.

USA gasoline production increased last week, averaging 9.6 million barrels per day.

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