Oil rises following suit, but pessimistic outlook for OPEC curbs gains

UNITED STATES, WASHINGTON (VOP TODAY NEWS) — Oil prices recovered on Friday after two days of declines, following equity markets, amid expectations of more stimulus from central banks that helped ease recession fears.

But oil gains have been constrained by OPEC’s reduction in its outlook for global demand for the remainder of the year as economic growth slows.

The group also cited challenges in 2020 as its competitors pump more crude, reinforcing the argument for maintaining an OPEC-led agreement to curb supplies.

Brent crude futures rose 41 cents, or 0.7 percent, to settle at $ 58.64 an ounce, after falling 2.1 percent in Thursday’s session and 3 percent in Wednesday’s session.

US West Texas Intermediate (WTI) crude futures rose 40 cents, or 0.73 percent, to settle at $ 54.87 a barrel, after falling 1.4 percent in Thursday’s session and 3.3 percent in Wednesday’s session.

Ahead of the OPEC monthly report, Brent touched a session high of $ 59.50 a barrel and US crude traded at $ 55.67 as investors anticipated further rate cuts from the Federal Reserve and moves by the European Central Bank next month to counter weak growth.

Both benchmarks end the week on small gains after two consecutive weeks of losses.

BNP Paribas cut its 2019 forecast for US crude by $ 8 to $ 55 a barrel and Brent crude by $ 9 to $ 62 a barrel, citing an economic slowdown amid the trade dispute.

The price of Brent is still about 10 percent above its level at the beginning of the year supported by cuts in supplies from OPEC and its allies, led by Russia, who form a group known as OPEC +.

In July, OPEC + agreed to extend oil production cuts until March 2020 to support prices.


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