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Brent crude prices to average higher in second half
July 2, 2019 | 4:38 PM
by Times News Service
Weaker global economic growth forecasts and uncertainty caused by the ongoing trade spat between China and the US are dampening demand sentiment. - Reuters file picture
 
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Muscat: Brent crude prices will average higher in the second half of 2019 than the $66.31 per barrel average achieved during the January to June period, according to 54 per cent of those polled in GIQ’s (Gulf Intelligence) monthly Energy Market Survey in June.

Almost a quarter (24 per cent) of participants felt the average would remain more or less the same as during the first half of the year, while 22 per cent were less optimistic and of the opinion it would drop below $66 per barrel.

Brent prices averaged in the $60s per barrel range during the first quarter of 2019, rising briefly to a stronger range in the low $70s per barrel during April. But the more positive numbers did not last with prices dropping into the low $60s per barrel in May and June, and this despite the re-imposition of US sanctions on Iranian oil exports as well as heightened geopolitical tensions in the Gulf region.

Weaker global economic growth forecasts and uncertainty caused by the ongoing trade spat between China and the US are dampening demand sentiment.



Meeting in Vienna on Monday, OPEC, with Russia’s backing, announced it would be extending its existing output cut deal which removes 1.2 million barrels per day (bpd), for a further nine months through to March 2020. This seemed to lend a limited amount of renewed support to prices as the decision had largely been factored in by the market.

On the political policy front, a small majority (51 per cent) of those polled in the GIQ survey said President Trump would have the most influence on the direction of oil prices during the second half of 2019, with Russia’s President Putin and Saudi Arabia’s Crown Prince Mohamed bin Salman at 35 per cent and 14 per cent respectively.



The US-China trade and tariff dispute witnessed what appeared to be a brief respite of détente last week at the G20 summit in Japan with the countries’ two leaders gesturing positive intentions but markets and economies remain uneasy and skeptical. When asked how this might impact US LNG exports, 66 per cent of those polled said Asia (excluding China) would continue to be the largest destination for the product, while 18% said it would be Europe and 16 per cent that it would be India. US LNG exports have surged in recent years, with the country becoming the fifth largest exporter last year. In 2018, 24 per cent of US LNG exports went to China.

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