Crude oil prices seen averaging below $70 in 2019

Brent crude futures were at $54.31 per barrel up 51 cents or 1% from their final close of 2018. WTI spot crude oil futures were at $45.85 per barrel up 44 cents or 1

Crude has fallen more than 20% this year — its worst since the oil crash

But at the same time, his sanctions on Iran's oil reduced supplies by at least a million barrels per day.

Oil started 2019 with another price slide as weaker Chinese manufacturing data pointed to slowing demand in the world's second-biggest consumer of the fuel and to growing risks of a global crude surplus.

Investor's skepticism about OPEC's ability to prevent a surplus this year had helped drive prices to an nearly 40 per cent decline to end 2018.

In an early December meeting, OPEC and non-OPEC countries agreed to take about 1.2 million barrels a day off the oil market - initially for six months - starting January, amid a persistent imbalance between global oil supply and demand.

Brent crude fell 70 cents to $53.10 a barrel at 0838 GMT.

The market, however, might still remain under some pressure from swelling production in the United States, which has emerged as the world's biggest crude producer this year, pumping 11.6 million bpd.

A Reuters poll among analysts revealed that most expect Brent to trade below US$70 a barrel this year, pressured by USA production growth and slower economic growth expectations that would offset any positive effect on prices from the OPEC+ crude oil production cuts.

West Texas Intermediate for February fell 39 cents to US$44.94 a barrel at 10:55 a.m. on the New York Mercantile Exchange.

The market direction might get dictated if US shale producers disregard bearish signals in oil prices and push for higher output next year, Jiaxuan said. "As a result, we expect prices to sink if OPEC or Russian Federation diverge from their production quotas notably", said Cailin Birch, an analyst at the Economist Intelligence Unit told Reuters.

"The omens are far from encouraging", said Stephen Brennock, an analyst at PVM Oil Associates Ltd.in London.

Worries about an economic slowdown and excess supply dragged down oil prices from multiyear highs reached in October 2018. "Do you think it's just luck that gas prices are so low, and falling?" Oil production has been at or near record highs in all three countries.

Trump, meanwhile, kept up his campaign to push prices down, boasting in a tweet Tuesday about low gasoline prices that he likened to a tax cut for consumers.

"Trump has reigned as the ultimate controller of oil prices this year because everything from sanctions against Iran, the trade war with China and even tensions with Saudi Arabia, he's been involved", said Sungchil Will Yun, a commodities analyst at HI Investment & Futures Corp.

That was the highest level since late 2014, the start of a deep market slump amid bulging global oversupply, and many leading analysts and traders at the time said they expected crude to hit $100 per barrel again by the end of 2018.

On the production side, all eyes will be on the ongoing surge in US output and on OPEC's and Russia's supply discipline.

"Don't underestimate shale producers and the wider United States oil industry in general".

But North American producers will likely begin to reduce spending on drilling in 2019 as prices fall below break-even levels for new wells in the Permian Basin and the Eagle Ford shale field in Texas, analysts said.

This story has been published from a wire agency feed without modifications to the text.

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