Crude oil futures dipped in mid-morning trade in Asia Wednesday as a bearish supply outlook kept a lid on prices. At 10:56 am Singapore time (0256 GMT), ICE March Brent crude futures were down 27 cents/b (0.50%) from Monday’s settle at $53.53/b, while the NYMEX February light sweet crude contract was 7 cents/b (0.15%) lower at $45.34/b. Brent crude futures ended 2018 down 25%, posting the first annual decline since 2015, and an oversupply outlook and slower macroeconomic growth prospects were keeping sentiment bearish going into 2019.
“It was a volatile year for oil prices in 2018, initially hitting multi-year highs in October, only to tumble subsequently due to concerns of a potential supply glut and weaker energy demand from an expected global slowdown,” UOB analysts said in a note Wednesday.
Key factors to watch in the year ahead were developments in OPEC production cut efforts, US offshore production, and US-China trade tensions, analysts said. “While most analysts expect oil to be higher by the end of 2019, the fundamental concerns on both the supply and demand sides could see the meltdown continue,” said OANDA senior market analyst Ed Moya in a note earlier in the week.
“If we see a framework agreement on the trade spat between the US and China, we could see positive sentiment return to the battered commodity,” Moya added.