Positive sentiment is driving the oil price, but the slightest hint of uncertainty will quickly undo any gains.
The first two weeks of trading got off to a good start with projections for more sustained economic growth and a possible resolution in the US-China trade dispute.
In Friday trading, Brent crude was priced close to US$61 with WTI holding above US$51 a barrel.
The OPEC supply adjustment is now underway to reach 1.2 million barrels a day as committed by OPEC and non-OPEC members in December.
Global shares look healthier
Global stock markets have begun to look more positive, the Federal Reserve has promised to be more patient and observant of consumer demands and President Trump’s bark may prove worse than his bite as a sense of reason appears to be emerging in the China trade talks.
The US waivers for several countries remain in place despite President Trump saying he was adamant the sanctions against Iran would be fully compliant many months ago.
No-one knows when these “temporary” waivers may be removed and this uncertainty is not helping the market.
Speaking at The Gulf Intelligence, UAE Energy Forum in Abu Dhabi this week, The UAE Minister of Energy and Industry, Suhail Al Mazrouei said "the waivers were not expected from OPEC’s side but when they came we had to deal with them and we changed strategy".
Producers expected the waivers to be short-lived, but by maintaining them in place indefinitely, the market soon became over-supplied.
Mazrouei also added that OPEC “was not playing any political game” with the US administration over oil supply, reiterating OPEC’s role to balance the market.
Iran exports lower
While Iran is still producing oil, exports have fallen to less than a million barrels a day in November.
Earlier in the year, Iran was exporting about 2.5 million barrels a day. Iran’s Oil Minister, Bijan Zanganeh visited Iraq this week for talks with the country’s Oil Minister Thamer Ghadhban.
In a joint press conference Mr. Zanganeh said Iran should “not comply with the illegal sanctions” against his country. Iran and Iraq are exploring agreement on the future development of oil fields that border both countries.
The Venezuelan President, Nicolas Maduro began his second term as President this week in the presence of many world dignitaries and the OPEC Secretary General, Mohammad Barkindo.
The OPEC Presidency rotates to Venezuela this year and the country’s Oil Minister Manuel Quevedo assumes the position for all meetings of the conference for 2019.
The OPEC Presidency rotates in an alphabetical manner, so it’s easy to look ahead to see who will assume that office.
President Maduro addressed the role of OPEC with Barkindo saying he will support the plan "to balance, stabilise and govern the oil market in the best way in alliance with the oil producing nations of OPEC and the non-OPEC countries."
Abu Dhabi hosts Sustainability Week in the days ahead and while the focus will be on alternative fuel and the energy transition, leading energy experts and ministers will converge on the UAE capitol.
International media will be covering the various events, hoping for some news breaking soundbites about the state of the oil market.
With prices as well as fundamentals gaining strength, ministers will be happy with the new year’s shift in sentiment and prices for now.