Kuwait- Global growth forecast affects oil prices- KAMCO
Date
2/14/2016 7:06:24 AM
(MENAFN- Kuwait News Agency (KUNA)) KUWAIT Feb 14 (KUNA) -- Oil prices continued to slide during January-16 on the back of the ongoing oversupply concerns. Expectations of a slowdown in global growth also affected prices pushing the average monthly OPEC oil price to below USD 30/b for the first time since March-04.On demand an extremely mild start o winter in the northern hemisphere led to a fall in seasonal demand for heating oil although the temporary severe weather conditions in the US East Coast and continental Europe helped in stemming some decline according to a report released by KAMCO Investment Company on Sunday Oil prices had fallen more than 13% until 11-February-16 after reports pointed to a larger surplus in 2016; however prices surged more than 12% the following day after a WSJ (Wall Street Journal) article quoted UAE's energy minister as saying that OPEC members are ready to cooperate on production cuts provided there is total cooperation even from non-OPEC producers. Nevertheless analysts termed the price surge as merely a "knee-jerk reaction as seen in the past." During January the slide in oil price was severe during the first half of the month when OPEC oil price declined by almost 28% to USD 22.48/b taking cues from depressing manufacturing numbers from China and IMF's announcement regarding slowdown in global growth. However prices started surging after speculations of a possible meeting between OPEC and Russia to discuss oil production started doing rounds. These speculations were laid to rest when the oil minister of Russia said that no such talks are scheduled and that any output cut is possible only if all crude-exporting nations are in agreement.A meeting between Venezuela which is pitching for efforts to curb oil price decline and Saudi Arabia was reportedly said to be positive although no concrete plan for curbing production was announced. On production there remains very little sign of any coordination on production cuts among big oil producers.Oil price got further support when Schlumberger said in its earnings report that it expects the balance of supply and demand to tighten in the medium term.Meanwhile average monthly OPEC oil price declined by a steep 21.2% to USD 26.5/b during January-16 the lowest monthly average price since September-03. Moreover the initial gains during the first week of February-16 started dwindling during the second week as OPEC said in its monthly report that supply would outpace demand by a higher margin during 2016 than previous expectations."We expect oil price to see further pressure in the near term with Iraq reportedly pumping oil at record level Iran planning to boost its production and Saudi Arabia increasing shipments. Moreover a move to safer bets by investors amid growth concerns could further boost USD that would ultimately make oil payments dearer." (end) fh.rk
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