Oil prices dip amidst economic downtown

Oil prices dipped on Monday by 13 cents amid concerns that an economic downturn may dent fuel consumption, but crude markets remain broadly supported by supply cuts led by producer group OPEC and U.S. sanctions against Iran and Venezuela.

Brent crude oil futures LCOc1 were at 67.03 dollars per barrel at 0231 GMT, down 13 cents, or 0.2 per cent, from their last close, but not far off the 68.14 dollars per barrel 2019-high reached last week.

U.S. West Texas Intermediate (WTI) futures CLc1 were at 58.32 dollars per barrel, down 20 cents, or 0.3 per cent, from their last settlement, and also not far off their 2019-high of 58.95 dollars from the previous week.

“The greatest downside risk to our oil price view is demand weakness on slower economic growth.

“Our base case is that global oil demand will increase by 1.3 million barrels per day (bpd) in 2019… A synchronized global slowdown in growth could push global demand growth to below 1 million bpd,” Bernstein Energy said on Monday.

U.S. manufacturing output fell for a second straight month in February, in a sign that the world’s biggest economy has been slowing down in the first quarter.

In Asia, Japan’s exports fell for a third straight month in February in a sign of growing strain from slowing global demand.

In spite this, oil prices have gained around a quarter since the start of the year amid U.S. sanctions against Iran and Venezuela, and as the Organisation of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia – known as OPEC+ – have pledged to withhold 1.2 million bpd in supply to prop up prices.

OPEC’s de-facto leader, Saudi Arabia said on Sunday that balancing oil markets was far from done as inventories were still high.