After touching a high of nearly US$ 84 for a barrel in the September month, crude oil prices are now falling and presently is near US$ 50 a barrel. With most authorities forecasting a slowdown in its growth next year, the concern about how crude oil demand will be faring in 2019 is only to be expected.
Prices have declined because of investors' concerns that the market may be oversupplied, and an OPEC decision on December 7 to cut output by 1.2 million barrels per day from October levels starting January 1 has so far failed to significantly stop crude oil's declining trend.
OPEC hasn't even started implementing its new six-month agreement to cut output, and already members responsible for most of the reductions have pledged to extend or even deepen it. Bloomberg quoted a Rakuten Securities analyst as saying, "There are several bearish factors in oil markets, and the situation won't improve anytime soon".
Oil surged on Wednesday, posting its strongest daily gain in more than two years in a partial rebound from steep losses that pushed crude benchmarks to lows not seen since 2017.
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U.S. crude futures settled at $42.53 a barrel, down $3.06, or 6.7 per cent. Brent crude futures settled down $3.35, or 6.2 per cent, at $50.47 a barrel.
The producers' alliance, known as OPEC+, plans to lower output by 1.2 million barrels per day, of which OPEC's share is 800,000 bpd, next year, and some ministers have even suggested taking further action.
Broader financial markets have been under pressure on worries about a global economic slowdown amid higher US interest rates and the U.S. Data showed that imports were only 33,558 barrels in November, down 88 percent from a year earlier.
"What's happening in the stock market is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand", Phil Flynn, an analyst at Price Futures Group in Chicago, told Reuters.
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Les soldes d'hiver 2019 devaient déjà être uniques par leur durée, leurs dates pourraient également être modifiées. Ces soldes d'hiver doivent être les premiers à ne durer que quatre semaines.
Whatever be the reason, this fall in oil prices would be beneficial for the Indian economy which imports almost 80 per cent of its oil demand.
Crude is the key raw material for oil marketing companies and a major portion of operating expenses for airline firms.
In what is worse, a partial shutdown of the us government contributed to losses in equities, with the Dow Jones Industrial Average plummeting 600 points while Nasdaq and S&P 500 entering a bear market on Monday. Asian stock markets retreated again on Wednesday.
Carbone also noted the link between oil prices and the equities sell-off. "$50 is a psychological support level (for Brent)", Margaret Yang said.
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