IEA says oil market is tightening, but global demand may falter

A pump jack stands at dusk in the Permian Basin area in Texas U.S. Bloomberg  Angus Mordant

The US crude output level remained at a record 12.2 million barrels per day (bpd).

Oil prices rallied more than 1 percent on Friday, with sentiment supported by OPEC-led supply cuts, escalating fighting in Libya and USA sanctions on petroleum exporters Iran and Venezuela.

"While no industry lasts forever, the age of oil is far from over", Bernstein said.

London-traded, the global benchmark for oil, was up 66 cents, or 1%, at $71.49.

U.S. West Texas Intermediate crude at Midland yesterday traded at the biggest discount to futures in nearly four months after Phillips 66 closed a unit for maintenance at its Borger, Texas refinery, adding to a backlog of barrels as production climbs.

On the demand side, most of the world's growth in fuel consumption is coming from Asia.

The glut of supply in the global oil market is falling after Saudi Arabia-led OPEC and Russia-led non-OPEC agreed on December 7 to trim their total output by 1.2 million barrels per day (bpd) for the first six months of 2019. The decrease was more than the five-year average of 5.1 mb due to larger gasoline draws and a lower crude build. March preliminary data show a significant crude build in Europe, ' said the report. The plant supplies Italy with gas through the Greenstream pipeline.

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Arsenal have the kindest remaining fixtures out of the other candidates, as they do not play any of the "big six" in the run-in. And the Chelsea FC defender is hoping for a repeat when the two teams meet at Anfield on Sunday afternoon.

The oil cartel and its allies will meet in June to decide whether to continue withholding supply.

It is expected that OPEC may consider raising oil output from July if disruptions continue and prices keep rallying.

The rig count fell for the past four months as independent exploration and production companies cut spending on new drilling to focus on earnings growth instead of increased output.

On the demand side, Chinese data showed exports rebounded last month, driving USA and euro zone bond yields to three-week highs and helping offset weaker imports and reports of another cut in German growth forecasts. Conflict between the United States and Iran could have also helped boost oil prices considering the risk of President Trump extending Iranian restrictions.

"While macro fears of an economic hard landing may be overblown, the concentration risk of global oil demand (in Asia) remains underappreciated", RBC Capital Markets said.

"We tend to focus on Trump's reaction to gasoline prices, but the Russian government is also continuously anxious about the street discontent factor that comes with rising gasoline prices", Jakob said.

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