Latest Energy News and Energy Policies

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<span>Summary..<o:p></o:p></span></div>
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<span>The previous week's price rise was
of course caused by heightened tensions with Iran…The ensuing correction was
not because of any de-escalation in tensions, or because of the surprise build
in US inventories…Prices retreated after the IEA revealed that there is an
abundance of oil in the market in 2020 while oil demand growth is likely to
remain weak…..Oil prices retreated after the International Energy Agency said
there is an abundance of oil in the market in 2020 while oil demand growth is
likely to remain weak. (AFP)..The previous week's price rise was of course
caused by heightened tensions with Iran…The International Energy Agency (IEA)
began 2020 by highlighting the challenges facing the oil market in 2020 while
ignoring its strong fundamentals…While pursuing this negative narrative, it
glossed over many important questions such as whether US shale producers plan
to increase their production amid the current drawback in drilling rigs…Brent
crude fell sharply to $64.98 over the week while WTI retreated below the $60
barrier for the first time in a month to $59.04 per barrel. The Brent/WTI
spread widened slightly to $5.94 per barrel…The previous week's price rise
was of course caused by heightened tensions with Iran. However, the ensuing
correction was not because of any de-escalation in tensions, or because of the
surprise build in US inventories…In fact, prices retreated after the IEA
revealed that there is an abundance of oil in the market in 2020 while oil
demand growth is likely to remain weak. This was enough to dampen oil prices by
around $4 per barrel on a weekly basis…Market participants are still
wondering if the downward movement will continue next week, especially
considering that the IEA expects demand growth to be just under 1 million
barrels per day, with a forecast surplus of 1 million barrels per day of
oil…This is a clear message from the IEA to the market that upcoming ample
supplies combined with weak global oil demand growth will cap oil prices in
2020…We have seen such messages from the IEA at the beginning of previous
years whenever the new year starts with an upward momentum in oil prices. OPEC
oil output last month was about 29.55 million bpd, which reflects continued
over-compliance with earlier announced production cuts…Overall, OPEC's
compliance with its cuts was 158 percent for December, according to S&amp;P
Global Platts data…Moreover, under the new quotas that went into force on
Jan. 1, OPEC's December production would result in 108 percent compliance…Yet,
some outlooks persist in forecasting a supply glut through the first half of
the year and say additional production restraint from OPEC and its partners may
be needed to prevent an oil price slump.</span><span><o:p></o:p></span></div>
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