Oil dips as China's economy slows but OPEC-led cuts support

"If the domestic and global forecasts are realized, crude oil production at these levels would allow the United States to maintain its status as the world's leading crude oil producer in both years", the EIA said.

OPIS chief oil analyst Tom Kloza on the outlook for oil prices.

The expert believes that bearish trends include a rising United States crude oil production, which reached 11.5 million b/d in November.

Crude oil output of the Organization of the Petroleum Exporting Countries (OPEC) dropped by 590 kb/d in December to reach 32.39 mb/d and non-OPEC supply fell by 360 kb/d in December to 61.2 mb/d, according to the IEA's Oil Market Report.

While the outlook has brightened, hedge funds will need more certainty on a trade deal or sustained growth to start significantly raising their long bets.

Soaring US Crude output, which neared a record 12 million barrels per day in early January, is fuelling some of the concern among traders and investors that growth in global supply this year will outpace demand.

Despite renewed hopes that a trade deal could be reached between the USA and China by the March 2 deadline, it may still not be enough to offset the negative impact on China's economic growth. Prices got another boost later, on expectations that U.S. sanctions on Iran would cut supplies to major importers including China, India and Japan.

The group said the impact of higher oil prices in 2018 was "fading", which should help to offset cooling economic growth over the coming months.

The second-largest was an involuntary cut by Libya, where unrest led to the shutdown of the country's biggest oilfield. EIA forecasts global oil demand to grow by 1.5 million b/d in 2019 and in 2020.

We have an EIA report today at 15:30 (GMT). While crude oil market saw highly active week so far, there is no visible change in actual price action. Schlumberger Ltd. offered more reassuring news for those anxious about a glut of USA crude. The total number of active oil and gas drilling rigs is holding steady at 1,075, with the number of active oil rigs decreasing by 4 to reach 873 and the number of gas rigs increasing by 4 to reach 202. The oil and gas rig count is now 114 up from this time a year ago, 105 of which is in oil rigs.

"By the middle of the year, USA crude output will probably be more than the capacity of either Saudi Arabia or Russian Federation", said the IEA, which kept its estimate of oil demand growth unchanged and close to 2018 levels at 1.4 million barrels bpd.