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Jakarta Post

Supply concerns put floor under oil prices

  • Mriganka Jaipuriyar
    Mriganka Jaipuriyar

    Associate editorial director, Asia & Middle East Oil News & Analysis, S&P Global Platts

Jakarta   /   Thu, September 13, 2018   /  01:24 pm
Supply concerns put floor under oil prices OPEC’s quest to balance oil markets is about to get murkier amid Venezuela’s ongoing economic crisis and as sanctions on Iran close in. (shutterstock/-)

International oil prices have staged a strong recovery since mid-August, with the ICE Brent futures contract gaining 10 percent and the WTI futures contract rising 8 percent. The rise in prices is not surprising as supply concerns have far outweighed concerns around the impact of an escalation in tariffs on global oil demand growth. 

OPEC, in its August report, said that hiking tariffs could reduce 2019 oil demand by up to 350,000 b/d. S&P Global Platts Analytics, however, expects the impact of tariffs on demand to be negligible, and is maintaining its demand growth forecast at 1.8 million b/d in 2018 and 1.9 million b/d in 2019. Supply concerns are, meanwhile, rising with United States sanctions on Iran looming and global oil stocks dropping to below five-year average levels.

The International Energy Agency, in its August monthly oil report, said t...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.