Markets

Oil markets cautious as OPEC cuts are met by rising USA output

Oil markets cautious as OPEC cuts are met by rising USA output

U.S. West Texas Intermediate (WTI) crude was at $56.72 per barrel, down 4 cents.The dips came after both crude benchmarks early last week hit highs last seen in 2015, but traders said the market had lost some momentum since then."Oil is fairly calm".

Global demand is forecast to be 30 percent higher by 2040, but still half as much as it would be without efficiency improvements.

Oil-dependent Venezuela's crude output dipped last month below 2 million barrels per day, its lowest level in almost three decades, global producer group Opec said on Monday.

Over the next 25 years, the world's growing energy needs are met first by renewables and natural gas, as fast-declining costs turn solar power into the cheapest source of new electricity generation.

In Abu Dhabi on Monday, the UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei, said that oil producers were expected to unanimously extend a production cut accord later this month, but its duration was still under discussion.

"The oil market should be able to find a longer-term equilibrium, with the oil price in a range of $50-70 a barrel", the agency said. But stringent fuel-efficiency measures for cars and trucks, and a shift that sees one-in-four cars being electric by 2040, mean that China is no longer the main driving force behind global oil use - demand growth is larger in India post-2025. The Organization of the Petroleum Exporting Countries' latest monthly data showed Venezuela reporting production of 1.955 million bpd in October, versus 2.085 million in September. Scientists just this week said that emissions of the heat-trapping gas rose this year after three years of not growing.

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Traders said they were cautious about betting on further price rises.

Chris Watling, CEO and chief market strategist at Longview Economics, was quoted as saying that the adoption of EVs could lead to global peak oil demand as soon as 2023, which will result in oil prices crashing to $10.

If planned pipeline projects come to fruition, the United States and Canada combined could export more than 700,000 bpd to China by 2040 - a drop in the barrel in the country's 15.5 million bpd demand.

The global energy markets are in the midst of "extraordinary times", writes Fatih Birol, executive director at the International Energy Agency in its annual World Energy Outlook, launched in Paris on Tuesday.

Between 2017 and 2040 the IEA estimates that more solar power capacity will be added globally each year than any other source of energy, with an annual average increase of almost 70 gigawatts.