Stronger Brent Crude Price Average Expected H2 2019 — GIQ June Energy Market Survey

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Stronger Brent Crude Price Average Expected H2 2019 — GIQ June Energy Market Survey

Brent crude oil has averaged $66.31 Y-2-D prices in H2 2019

Gulf Intelligence - Brent crude prices will average higher in the second half of 2019 than the $66.31/bl average achieved during the January to June period, according to 54% of those polled in GIQ’s monthly Energy Market Survey in June. Almost a quarter (24%) of participants felt the average would remain more or less the same as during the first half of the year, while 22% were less optimistic and of the opinion, it would drop below $66/bl.

Brent prices averaged in the $60s/bl range during the first quarter of 2019, rising briefly to a stronger range in the low $70s/bl during April. But the more positive numbers did not last with prices dropping into the low $60s/bl in May and June, and this despite the re-imposition of US sanctions on Iranian oil exports as well as heightened geopolitical tensions in the Gulf region. Weaker global economic growth forecasts and uncertainty caused by the ongoing trade spat between China and the US are dampening demand sentiment. 

Meeting in Vienna on Monday, OPEC, with Russia’s backing, announced it would be extending its existing output cut deal which removes 1.2 million b/d, for a further nine months through to March 2020. This seemed to lend a limited amount of renewed support to prices as the decision had largely been factored in by the market.

Who will have biggest influence on direction of oil prices in H2 2019?

On the political policy front, a small majority (51%) of those polled in the GIQ survey said President Trump would have the most influence on the direction of oil prices during the second half of 2019, with Russia’s President Putin and Saudi Arabia’s Crown Prince Mohamed bin Salman at 35% and 14% respectively.

Who will buy most US LNG Following the Chinese imposed tariffs?

The US-China trade and tariff dispute witnessed what appeared to be a brief respite of détente last week at the G20 summit in Japan with the countries’ two leaders gesturing positive intentions but markets and economies remain uneasy and skeptical. When asked how this might impact US LNG exports, 66% of those polled said Asia (excluding China) would continue to be the largest destination for the product, while 18% said it would be Europe and 16% that it would be India. U.S. LNG exports have surged in recent years, with the country becoming the fifth largest exporter last year. In 2018, 24% of US LNG exports went to China.