OPEC raises oil consumption forecast on higher economic growth prospects for 2018

Energy ETF Rally: About More Than Just Iran

Global markets have tightened as the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, has been withholding supplies since 2017 in order to push up oil prices.

The OPEC cuts and looming sanctions come amid strong demand.

This decline is largely due to an Opec-led supply cut deal put in place since the beginning of previous year to help stabilize prices, coupled with growing demand in Asia.

Oil and gas analyst for Hydrocarbon Capital Malcolm Graham-Wood predicts that about 1m barrels of oil will go off the market following the decision, reducing the supply of oil which was tight from before.

"That said, there are problems with transporting the oil at present, as the high $12 per barrel discount on WTI Midland as compared with WTI Cushing illustrates".

The company's revenues increased "on the back of higher crude oil prices and optimization in sales channels despite the remaining constraints in production within the OPEC+ Agreement", it said on a statement issued on Monday.

But oil ministers have since said other metrics should be considered such as oil industry investment, suggesting they are in no hurry to end supply cuts.

The Organization of the Petroleum Countries said in its monthly report Monday that petroleum stockpiles in the developed world stand just 9 million barrels above the five year average - a sign that the glut that weighed on the market for years is almost gone. That is roughly 800,000 bpd less than the amount Organization of the Petroleum Exporting Countries says the world needs from the group this year. Venezuela, whose output has plunged due to an economic crisis, told OPEC its production fell to 1.505 million bpd in April, believed to be the lowest in decades.

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The 14-member OPEC pointed to strong growth in developed and emerging economies in the first quarter.

LONDON, May 15 (Reuters) - Oil prices hit a 3-1/2-year high on Tuesday, supported by tight supply and planned USA sanctions against Iran that are likely to restrict crude oil exports from one of the biggest producers in the Middle East.

This estimated growth rate was revised higher by 25,000 barrels per day compared to last month's estimates.

On Monday, OPEC forecasted that United States oil production will account for most of the growth in the industry this year.

Opec also revised its estimate of non-Opec supply growth in 2018, increasing it by 10,000 bpd to 1.72 million bpd. The US is the lead producer among these countries and produces 10.7 million barrels per day.

With renewed USA sanctions looming against OPEC-member Iran, analysts said crude prices were well supported.

Alongside a broader escalation in regional conflict, Citi economists argue a sustained increase in oil prices and weaker-than-anticipated global economic growth could combine to heighten the risk for financial market participants, CNBC reported.

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