Barclays cuts 2019 Brent oil price forecasts

Barclays cuts 2019 Brent oil price forecasts

Tensions flared anew this week as National Assembly leader Juan Guaido moved to oust strongman President Nicolas Maduro, with the backing of the USA and other countries.

"With the USA now clearly taking sides with the opposition, changes might be in the making", said Tamas Varga, an analyst at PVM Oil Associates Ltd.in London.

"Though oil prices have demonstrated for higher upside potential in the first quarter of 2019, mounting economic challenges will continue to impede exponential gains in the longer term", Lu added.

Over the past four weeks, motor gasoline product supplied averaged 8.7 million barrels per day, down by 0.1 percent from the same period previous year. The benchmark posted a 3 percent decline this week after it opened Monday at $62.74 a barrel.

Brent crude was down 10 cents or 0.2 percent at $61.04 a barrel by 1435 GMT, while USA crude rose 15 cents or 0.3 percent to $52.77.

"The breakdown in diplomatic relations was interpreted as upping the possibility of a US sanction on Venezuelan oil that would likely force USA refiners to seek alternative supplies at higher prices, hence the WTI gains", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. The loss of Venezuelan barrels could drive up crude prices and squeeze American refineries that take in hundreds of thousand of barrels of Venezuelan oil each day.

But McMonigle, now senior energy policy analyst at Hedgeye Potomac Research, believes Trump is very likely to impose sanctions.

"The evolving situation in Venezuela appears capable of delaying our expected test of $50 support".

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Oil market sentiment was also weakened by an increase in USA crude inventories after refineries cut output, data from industry group the American Petroleum Institute showed on Wednesday.

With Iran already crippled by US sanctions on its oil, a further drop in Venezuelan exports could squeeze global supply and rapidly push up prices. The bank cut its 2019 average Brent forecast to $70 a barrel, from $72 previously. The question is whether Canada can get them enough oil to slake their demand. Drillers added 10 oil rigs in the week to January 25, bringing the total count to 862, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.

Global oil markets are facing an uncertain year with slowing global growth driving less global demand for oil while the supply picture looks unclear with production cuts by OPEC and Russian Federation potentially counteracted by the growth in USA shale oil output.

Refining profits for gasoline are crashing around the world as consumption stalls amid a huge wave of new supplies, resulting in record inventories in Asia, America and Europe.

USA total oil products imports last week averaged 2.4 million barrels per day, up by 310,000 barrels per day from the previous week, while US total oil products exports last week averaged 4.7 million barrels per day, down by 153,000 barrels per day from the previous week.

Potentially bullish near-term news for oil investors was also offset Thursday by news from U.S. Secretary of Commerce Wilbur Ross that the U.S. and China are still "miles and miles" away from a trade deal.

According to Reuters polls of hundreds of economists worldwide, a synchronised global economic slowdown is underway and would deepen if the U.S.

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