Oil prices rise on OPEC's supply cuts and healthy demand

Khalid al Falih speaks during a news conference in Riyadh

The drop in fuel oil demand and the rise of petrochemicals over the next few years will benefit the USA oil producers whose typical crude products are lighter, the IEA said.

USA crude shipments are projected to stand at 8.93 million barrels a day in five years - just 0.59 million less that Riyadh, and 0.24 million barrels more than Moscow. In 2017-2018, India's crude oil imports from Saudi Arabia were 36.8 million tonne, accounting for 16.7 per cent of total imports.

Saudi Arabia plans to produce well below 10 million barrels a day in April, a similar pace to March, when it cut output by 500,000 barrels a day from February, the same official said, asking not to be named discussing internal deliberations. Mr. Falih said the group was unlikely to change its output policy in April and if required would make adjustments in June. The oil cartel and partners agreed to slash production in December, taking 1.2 million barrels per day off the market in order to prevent supply glut and a further slump in crude prices.

India has raised concerns about the rising price of crude oil during a meeting with Minister of Energy, Industry and Mineral Resources of Saudi Arabia and Chairman of Saudi Aramco, Khalid A Al-Falih.

Sources recently said the most likely scenario is that the current supply cuts will be extended in June but much depends on the extent of United States sanctions on OPEC members Iran and Venezuela.

US crude oil output will rise almost 2.8 million bpd, growing to 13.7 million bpd in 2024 from an average of just under 11 million bpd in 2018, the IEA said, making the United States by far the biggest oil producer in the world.

A host of involuntary supply curbs in OPEC members caused by unrest in Libya, and US sanctions on Iran and Venezuela, have also helped to boost prices.

In its monthly Oil Market Report in January this year, the IEA said refiners face a challenging year in 2019, with processing capacity set to increase by 2.6 million bpd, the biggest growth in four decades, "while margins are already pressured by low gasoline cracks due to oversupply and weak demand".

On the other hand, production in USA hit a record of more than 12 million bpd in February.

The United States will drive global oil supply growth over the next five years, adding another 4 million barrels per day (bpd) to the country's already booming output, the International Energy Agency said on Monday. "In addition, global GDP growth has been soft and oil demand has yet to pick up seasonally", Bank of America Merrill Lynch said in a report on Monday.

Oil markets have generally been supported this year by this ongoing supply cuts.

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