Brent traded at $67.19 despite pressure from a combination of issues, mainly the revised demand outlook, oversupply concerns and President Trump’s call on OPEC to keep production at current levels.
Khalid al-Falih, Saudi’s energy minister had said that the Kingdom could reduce half a million barrels from its daily production for fear of an oversupply and that OPEC as a whole might reduce production by 1 million barrels per day.
Despite a warning from Russia’s Alexander Novak that hasty decisions are not the smartest ones, the Saudi minister gave a strong signal that the cartel was so worried about the discrepancy between earlier analyst expectations about demand and supply and reality that it was ready to act immediately to prop up prices.
At the same time, OPEC revised downwards its global oil demand forecast for this year and next, for the fourth month in a row. The cartel said in its latest monthly oil market report it expected oil demand this year to rise by 1.5 million barrels per day, a downward revision of 40,000 barrels per day from last month’s report.
It also sees global oil demand rising by 1.29 million barrels per day, which is 70,000 barrels per day less than what OPEC expected last month in 2019.
Despite today’s partial rebound, crude is now officially in a bear market, having lost 20 percent over a little more than a month thanks to this combination of factors along with the sanction waivers that the U.S. administration granted to eight large Iranian oil importers, pretty much diffusing the bomb of shortage concern that had some analysts forecast Brent at $100 a barrel by the end of the year.