Oil prices to remain supported amid OPEC output cuts - ANZ

Dhwani Mehta FXStreet

Analysts at Australia and New Zealand Banking Group (ANZ) offer their oil-price outlook heading amid US-Iran geopolitical risks and ahead of the key OPEC JMMC meeting due later on Thursday.

Key Quotes:

“Replacement of Saudi Arabia's Energy Minister, Khalid Al-Falih, with Prince Abdulaziz al Salman ... We don't see the move as a prelude to significant change

As OPEC and its allied producers (such as Russia) meet in Abu Dhabi, they face unprecedented uncertainty.

Tension between the US and Iran/Venezuela continues to impact the market.

Trade tensions are now also weighing on manufacturing activity.

Global vehicle sales, a key determinant of gasoline demand are on track to fall 6% in 2019

PMIs remain weak across the world.

We have subsequently reduced our forecast oil demand growth to 1mb/d this year (from 1.2mb/d).

Even so, we see sizeable stock drawdowns in Q4.

With crude oil well below Saudi Arabia's target of USD80/bbl, we feel they have no choice but to continue the current production cut agreement to help support current prices. However, the ability to push prices higher looks limited.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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