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Justin Smirk, analyst at Westpac, points out that the global crude oil market is now facing a number of geopolitical stand offs including the US versus Iran, US versus President Maduro in Venezuela and a potential civil war in Libya.

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“US waivers on Iran embargos allowed Iran to export around 1.2 million bbl/d and their removal would move the market to a more balanced position. These supply risks come as lower OPEC production offset strong growth in non-OPEC resulting in a net gain of one million barrels per day in crude supply this year.”

“Crude prices recovered from a low of $50/bbl early this year to just above $70/bbl in early May as supply tightened. There were some economic concerns in early 2019 pointing to weaker support for the growth in oil demand but these have eased holding crude around US$70/bbl.”

“Our forecast for 2019 has been nudged to US$68 from US$65 as we now expect crude to hold US$70 to September before easing back to US$65 by year end.”