Oil prices continued to rise during February '16, recording highest monthly jump in almost nine months – Report

KUWAIT, March 16 (KUNA) — Oil prices continued to rise during February-16, recording the highest monthly jump in almost nine months after four OPEC and non-OPEC producers agreed to stabilize the oil market by freezing output, a specialized report said Wednesday.
The oil price trend during the first two weeks of March this year was even stronger, signaling a bottoming of oil prices on the back of USD weakness, a stronger Yuan that reached its highest level in 2016, as well as a continued decline in oil rigs in the US that reached its lowest recorded level in the history, said KAMCO Research in its monthly oil report.
During mid-February this year, and in a bid to stabilize the market, Saudi Arabia, Qatar, Russia and Venezuela agreed to freeze their respective oil production at January, 16 levels with a caveat that other producers follow suit. This led to a short-term oil price rally that pushed prices to a three-month high level of USD 35.62 pb of OPEC oil. However, noted the report, despite welcoming the decision to freeze output, Iran’s oil minister said in a recent announcement that it would consider joining other oil producers in seeking ways to rebalance the global oil market only after it reaches a pre-sanction crude output of four million barrels a day (mb/d), a level not seen since 2008.
Citing the monthly report of the International Energy Agency (IEA), KAMCO said that oil prices may have bottomed as the production decline by United States and other non-OPEC producers is at a faster pace, whereas the increase in production by Iran is expected to be gradual. The agency forecasted a production decline of 0.75 mb/d in 2016 as against its previous expectation of 0.6 mb/d as a result of low oil prices that has started affecting high-cost production.
Contrastingly, OPEC in its monthly report said that the global demand for its oil in 2016 will be less than previous expectations as supply from non-OPEC producers appears more resilient to low prices. As a consequence, the global demand for OPEC’s crude is expected to decline by 90 tb/d from last month’s expectation to average at 31.52 mb/d in 2016.
Established in 1998 and listed on the Kuwait Stock Exchange (KSE) in 2003, KAMCO (KIPCO’s Asset Management Company) is a subsidiary of United Gulf Bank (UGB) and is the asset management and investment banking arm of KIPCO (Kuwait Projects Holding Company). (end) hb