Oil prices returned to the normal with the end of the first week of November due to concerns over the growth of the global economy and the increase of oil supply. The last trading of Brent crude was at USD62.5 per barrel, which is a rise of 16.2 percent since the beginning of the year.
The trading relapsed from its highest score in four weeks on November 5, when it reached approximately USD63 per barrel.
The National Bank of Kuwait (NBK) issued a report revealing that the whole indicators rose for three days due to signs of progress in the US-Sino commercial ties. It is possible to reach a commercial agreement in credit to the positive number of US jobs and manufacturing data.
These reports also noted that it is unlikely for OPEC+ to push towards more output cut during the ministerial meeting scheduled in December. This followed OPEC forecasts that the demand for global oil would grow 1 million barrels per day in the mid-term. US shale oil would rise sharply by 40 percent by 2025.
Further, the International Monetary Fund (IMF) and the International Energy Agency (IEA) reduced their forecasts for the global economy growth and the global demand for oil in October.
The IMF cited rising trade barriers and increased geopolitical and trade uncertainty among the factors driving a “synchronized” global slowdown that left growth in 2019 at 3.0 percent - the slowest since the financial crisis more than ten years ago. Projected economic growth in 2020 was reduced by 0.2 percent points to 3.4 percent.
The IEA reduced its estimates for 2019 by 65,000 barrels a day to growth of 1m bpd in its monthly oil market report. For 2020 it fell by 110,000 bpd to 1.2m bpd.
“We expect growth in 2019 to be the weakest since 2016, following evidence of a slowdown in several major consumer regions and countries, including Europe, India, Japan, South Korea and the US,” the IEA said.
Non-OPEC supply growth, led by robust US shale growth, dominates the supply outlook, helping to offset the cutbacks in production that OPEC+ orchestrated this year.
US crude production reached a historic high of 12.6m bpd in October. The IEA sees US crude oil production alone increasing by 1.2m bpd in 2019 and 0.9m bpd in 2020, which accounts for at least 75 percent of the crude that OPEC+ removed from the market.