Following the weakening of the capital market, the price of oil shake

RakyatDigital. World crude oil prices slumped nearly two percent on Monday, when the United States (US). Weakening follows the weakening of global capital markets due to demand worries.

Reported by Reuters on Tuesday, the price of Brent crude oil futures sank US $ 0.75 to US $ 60.96 per barrel. Meanwhile, the price of US West Texas Intermediate (WTI) crude oil futures fell US $ 0.95 to US $ 51.66 per barrel.

The weakening of the global capital market occurred for five consecutive days. The weakening of capital markets in Europe and Asia extends to Wall Street triggered by a signal of a new dispute between the US-China which will impact on global economic growth.

The market was also burdened by confusion over the postponement of the vote regarding the Brexit agreement by Prime Minister Theresa May. In addition, the weakening also occurred due to the recent decline in world economic data including the US, China, Japan and Germany.

"The stock market correlation and oil market returned this morning," said Partner Again Capital Management John Kilduff in New York.

According to Kilduff, concerns regarding the projected economy and global oil demand have had a negative impact on the market. Oil prices closed up three percent higher on Friday as the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, agreed to cut oil production by 1.2 million barrels per day (bpd) from January 2019.

Earlier this week, the United Arab Emirates Energy Minister said the agreement would be signed in three months in Saudi Arabia, when OPEC and its allies would decide to extend the agreement after six months.
"The agreement last Friday seems pretty good, or maybe we should call it the best for the current conditions," said Expert PVM Oil Associates Market Strategist Tamas Varga.

However, according to Varga, the agreement will not provide market support for the long term because it cannot drain global oil inventories.

This year, the global capital market has fallen almost eight percent so far. This weakening was triggered by sentiment towards the slowing down of corporate earnings and the threat of the widespread impact of trade disputes between the US and China.

In addition, there is a sharp increase in the growth rate of crude oil supply this year in the three largest oil producers in the world, the United States, Saudi Arabia and Russia. This prompted analysts about the prospect of demand that could not absorb the additional oil supply.

"As usual, prices are not an OPEC + policy target, but in our opinion the current price level meets the interests of most participating countries," said JBC Energy consultant.
NBD analyst Edward Bell assessed the scale of production cuts was not enough to push the market into a deficit.

"It is estimated that the market surplus of around 1.2 million bpd will occur in the first quarter of 2019 with a new production level," he said.
For information, oil prices have fallen sharply by almost 30 percent since October 2018. The weakening was triggered by signals of slowing world economic growth.

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