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Jakarta Post

Tightening supply-demand balances supports oil prices

  • Mriganka Jaipuriyar

    Head of news, Asia, S&P Global Platts

Singapore   /   Wed, November 20 2019   /  01:30 am

Oil prices have gained around 10 percent since early October and prices are expected to be supported in the near term by easing recession risks and tightening supply-demand balances. “Negative shocks on the global economy are gradually starting to wear off. Meanwhile, previously enacted policy support mechanisms are finding traction [...],” S&P Global Platts Analytics said in a recent report, adding that policymakers appear to be in control. As oil demand growth stabilizes, supply is looking constrained. Increased refinery runs are expected to draw down stocks, the Organization of the Petroleum Exporting Countries (OPEC) is leaning toward extending its output cut agreement, and United States' shale production is slowing. Moreover, the Saudis may exercise supply restraint in order to support prices ahead of Saudi Aramco’s initial public offering (IPO), and the slowing supply com...