Oil market confused by mixed signals

Oil market confused by mixed signals

Oil prices rallied more than 1 percent on Friday, with sentiment supported by OPEC-led supply cuts, escalating fighting in Libya and USA sanctions on petroleum exporters Iran and Venezuela.

The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. Additionally, U.S. crude output remained at a record 12.2 million barrels per day.

"While no industry lasts forever, the age of oil is far from over", Bernstein said.

New York-traded crude was up 62 cents, or 1%, at $64.20 per barrel by 11:00 AM ET (15:00 GMT).

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Friday, helped by better-than-expected trade balance data from China, which dampened concerns over a global economic slowdown.

In fact, the sources had also revealed that the OPEC might even raise output from the beginning of third quarter of 2019, if Venezuelan and Iranian crude supply fall further and the crude oil prices keep surging.

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The Canadian Central Bank said that the rising prices are fed by geopolitical factors and could bring prices to $80 per barrel or more.

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Bombing by a warplane occurred on Friday near the Mellitah oil and gas plant, jointly operated by Italy's ENI and Libyan state oil firm NOC, a Libyan National Army (LNA) military source and residents said.

OPEC and its allies meet in June to decide whether to continue withholding supply.

A fourth OPEC source said there were talks about ideas such as whether OPEC should continue with the cuts alone, a deal extension of only three months to keep Russian Federation on board or pumping more if prices rise further.

The rig count fell for the past four months as independent exploration and production companies cut spending on new drilling to focus on earnings growth instead of increased output. However, U.S. gasoline stocks fell by a whopping 7.7 million barrels last week. The International Energy Agency (IEA) also warns in its monthly report of a possible shrinking demand due to current economic conditions and all in all speak of mixed signals.

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