Oil prices to improve in first half of 2019

Emerging markets demand and supply cuts could lead to an oil price recovery

Ruth Saldanha 4 January, 2019 | 6:00PM
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Earlier this week, on the first trading day of 2019, crude-oil prices bounced more than 4%, before giving back some of the gains, to trade around US$55 a barrel. The gains came after a steep drop in prices from October 2018, when West Texas Intermediate Crude touched US$75 per barrel.

“After outperforming the broader market for most of 2018, the Morningstar Global Energy Index dropped 22% in the fourth quarter through Dec. 20, owing to the steep drop in oil prices that began in October,” Morningstar sector director Jeffery Stafford wrote in an analyst note.

Oil prices in Canada also gained. The Alberta government’s oil production cuts came into effect on Jan. 1, and as a result, the difference between Western Canadian Select and West Texas Intermediate oil prices was about US$12.50 per barrel on Wednesday afternoon, according to Calgary oil brokerage Net Energy, an improvement over the US$17.52 per barrel average for spot contracts for January delivery signed last month.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Enbridge Inc52.84 CAD-0.68Rating
Enterprise Products Partners LP24.64 USD-0.22Rating
Schlumberger Ltd34.47 USD-0.78Rating

About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor at Morningstar.ca. Follow her on Twitter @KarishmaRuth.

 
 
 

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