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Since 2016, OPEC and a number of other major oil prices like Russia have been in a concerted effort to cut 2% of the global crude supply in an attempt to diminish the global supply glut and stabilize crude prices. Analysts now project the oil market could move into a deficit in the second part of 2018 and 2019 of 0.5 million barrels and later 0.3 million barrels per day as demand begins to outpace supply.
Asia could provide a supporting pillar for the energy market as demand among Asian economies is expected to surpass $1 trillion this year, or twice as much as in 2015 and 2016. Asia-Pacific consumers consumes over 35% of the 100 million barrels of oil the world uses per day and the percentage is only rising, Reuters reports.
“While there are some short-term concerns around rising production both from OPEC and U.S. shale, along with trade war-associated risk, the long-term story is bullish. Rising demand and the most recent order from the State Department are two positive catalysts,” notes CNBC.
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