The United States Oil Fund LP (NYSE: USO) traded modestly higher Thursday morning after OPEC maintained its outlook for global demand.
In its monthly report, OPEC said it's maintaining its previous estimate for global oil demand to grow by 1.24 million barrels per day this year to 99.96 million barrels.
Why It’s Important
The reiteration of OPEC’s demand growth projections was likely reassuring for oil investors after the European Central Bank cut its 2019 growth outlook and China said it's expecting its slowest growth in decades this year.
Oil prices have slumped following a late-2018 rally after global supply wasn't impacted as much by new Iran sanctions as investors had anticipated. OPEC announced in December it would be cutting production by 1.2 million bpd in 2019 to help balance the market in the near term.
A Closer Look
On Thursday, OPEC said its crude oil production dropped by 221,000 bpd in February to 30.55 million bpd. OPEC supply dropped by 797,000 bpd in January when the new cuts first went into effect.
Production in Saudi Arabia dropped by 86,000 bpd in February to 10.09 million bpd. Venezuela, which is in the middle of a political and economic crisis, saw production decline by 142,000 bpd in February. Russia’s production dropped by 40,000 bpd.
Total global oil supply in February dropped by 160,000 bpd to 99.15 million bpd.
OPEC inventories increased by 22 million barrels in January to 2.88 billion barrels.
Investors will be watching to see if OPEC sticks to its production cut agreements and maintains its demand outlook in coming quarters.
WTI crude oil prices traded higher by 0.3 percent to $58.47/bbl on Thursday morning.
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