Oil Prices Rise On Brighter Global Economic Prospects, OPEC Cuts

Proshare

Wednesday, January 24, 2018 / 12:50 PM / By  Tsvetana Paraskova for Oilprice.com 

Oil prices were up early on Tuesday, supported by a brighter outlook on the global economy for this year and next, as well as the continued high compliance of OPEC and allies with their joint oil production cuts.

At 07:10 a.m. EST on Tuesday, WTI Crude was up 0.27 percent at 
$63.74, while Brent Crude was trading up 0.29 percent at $69.23. 

In its World Economic Outlook Update, the International Monetary Fund (IMF) 
revised up on Monday its projections for global growth by 0.2 percentage point to 3.9 percent for 2018 and 2019, reflecting increased global growth momentum and the expected impact of the U.S. tax policy overhaul. Last year, global economic activity continued to firm up, and global growth is forecast to have been 3.7 percent, up 0.1 percentage point compared to the previous outlook. Notable upside surprises in European and Asian economies further strengthened the overall global economy, the IMF said. 

“Some 120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010,” the IMF said, noting that improving global growth outlook was one of the main reasons for the higher oil prices at the end of last year and early this year.
 

While global economic growth and expectations of robust global oil demand growth are pushing oil prices higher on the demand side, from the supply side, OPEC and its non-OPEC allies led by Russia continue to tighten the market by restricting oil production. Over the weekend, the Saudi and Russian energy ministers reiterated their commitment to the cuts, and Saudi Arabia’s Khalid al-Falih went further, suggesting that the cartel and its non-OPEC partners need to be talking about a 
longer framework for that cooperation. 

“The outlook for 2018 is roughly balanced for most of the year, but inventories are set to rise in Q4 2018,” BNP Paribas told 
Reuters, commenting on the global oil inventories picture for this year. 

The French bank raised its oil price forecasts for this year by $10, and now sees WTI averaging $60, with Brent averaging $65 in 2018.

Proshare Nigeria Pvt. Ltd.

Barclays, for its part, revised up its Brent forecast too, by $5 to $60, citing strong oil demand growth and crumbling production from Venezuela.

The possible headwinds to a further increase in oil prices include rising U.S. oil production, weakening refining margins across the world that could slacken refinery purchases, and money managers’ 
very crowded record net long position in the most important futures and options linked to crude oil.
 

Recent OilPice.Com Articles
Saudis Unmoved By Oil Price Surge
New Breakthrough Boosts Solar Fuel Efficiency
The No.1 Challenge To The Oil Rally 

Related News
1. House of Representatives Passes Petroleum Industry Governance Bill
2. NNPC to Build More Depots, Expand Market Share
3. The Shale Surge Is Far From Over - OilPrice Intelligence Report
4. Factors That Will Affect the Price of Oil in 2018
5. Why Africa’s top oil producer is low on gasoline
6. The Prominence of Electric Vehicles
7. Geopolitical Wildcards Could Push Oil Beyond $70
8. Average Prices of PMS, AGO, HHK and Cooking Gas – December 2017
9. Axxela Expands Gas Supply Across West Africa
10.The Length of Recovery is Unclear as Oil Price Heads in The Direction of $70 per Barrel
11. Shale Restraint Could Lift Oil To $80
12. Oil Crosses $70 Per Barrel Rubicon Line
13. Can Oil Break The $70 Threshold?
14. The Casualty Effect of Sustained $68 per barrel on the Econom
15. A Poor Use of Limited Resources; Fuel Shortages Highlight Nigeria’s Failure to Refine Domestically
16. Nigeria’s Proposed PMS Pricing :Matters Arising
17. Oil Markets Start 2018 With A Bang
18. No Request from Presidency on Payment to Oil Marketers-Senate
19. Oil Price Increases on Tighter Market Supply
20. NEITI: Nigeria’s Oil Revenues Plunged by 55% to $24.8b in 2015
21. Fuel Scarcity Dampens Christmas Celebrations
22. Fuel Crisis: Senate Summons Kachikwu, Baru
23. OilPrice Intelligence Report: Oil Holds Steady Through Holidays

    READ MORE:
    Related News
    SCROLL TO TOP