Today's Asian session has been marked by weakening oil quotes. The negative dynamics in the market is related to the reports about record daily oil output in the USA reaching 11.9 million bbl (11.7 million bbl a week ago), as reported the Energy Information Administration.
According to the available data, the WTI prices dropped to some $51.93/bbl; Brent prices were recorded near $60.97/bbl at the Asian session.
The short-term outlook of the authority covers its expectations of oil production upturn to the record high of 12 bbl per day and even 13 million bbl by 2020. However, this scenario can offset the impact from the output cutbacks made by the OPEC+ members. For reference, the oil cartel agreed to reduce oil output at the end of last year.
Other figures showed that petroleum reserves increased by 7.5 million bbl, which is well above the anticipated upturn of 2.77 million. Distillates reserves soared by 2.97 million bbl (forecast – 1.57 million bbl).
Besides, the EIA expects that benchmark Brent oil will be priced near $61/bbl in 2019 and $65/bbl in 2020. At the same time, the 2018 quotes were at $71/bbl on average.
At the same time, oil prices are now restrained by the global economic slowdown, especially once Beijing reported below-expectations export results and weak PMI index in early January.
Notably, the events observed this week definitely affected the economic perspective. In the UK Theresa May failed during the Brexit vote in the Parliament. As a result, there is a time to sign an agreement till March 29 otherwise the UK will face hard-Brexit with heavy economic losses to follow.