Page 13 - Malaysia Marine & Offshore Industries Directory 2019/2020
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                 Amid escalating trade tensions and tighter global financial conditions, the Malaysian economy recorded a respectable growth of 4.7% in 2018. Growth in 2018 was further affected by unanticipated supply disruptions in the commodity-related sectors. For 2019, as supply disruptions recede and new production facilities commence, the Malaysian economy is expected to continue to expand at a steady pace. Private sector demand is expected to remain the main driver of Global oil Performance In 2018, Dated Brent averaged US$72 per barrel (as at 7 December 2018), compared to average 2017 price of US$54 per barrel, a 33% annual increase. Oil prices have been fluctuating in 2018 from year-high of US$86.20 per barrel in early October to lowest of US$57 per barrel in end November as the global oil market turned from tight to oversupply. Extension of production cut by OPEC+ to end 2018 managed to stabilise the global oil market. Commercial oil inventories for the Organisation for Economic Cooperation and Development (OECD) countries declined sharply to below the five-year average of 2.8 billion barrels in March 2018. However, towards the end of year, the global oil market turned into surplus resulting in oil prices weakening to below US$60 per barrel. This was driven by demand concern and increased supply from the US. Production from the US continue to grow, hitting a record-high of 11.7 million barrels per day (bpd) in November 2018 to average 10.9 million bpd in 2018. OECD oil stocks increased by 63 mil barrels from March 2018 to 2.9 billion barrels at the end of Q3 2018, indicating a surplus market. On 7 December, OPEC+ pledged to extend the production cut to June 2019 with participating members in OPEC reducing output by 800,000 bpd and non-OPEC 400,000 bpd, with the intent to stabilize the oil market. However, growth amid fiscal rationalisation while the external sector would be weighed down by weaker global demand. Although sentiments have moderated from recent highs, private sector expenditure will continue to be supported by fundamental factors such as continued income and employment growth. Risks to growth remain tilted to the downside, stemming mainly from further escalation of trade tensions and tightening of global financial conditions. MALAYSIA MARINE & OFFSHORE INDUSTRIES DIRECTORY 2019/2020    the growth of US tight oil production and expectation of global oil demand growth amidst the concern on trade war and weakening emerging markets’ currencies will influence the global oil market in 2019.  9 

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