Oil prices rise on OPEC supply cuts, United States sanctions on Iran, Venezuela

Cornelia Mascio
Marzo 14, 2019

"Ongoing trade disputes between major powers and a disorderly Brexit could lead to a reduction in the rate of growth of global trade and oil demand", the IEA said in its medium-term oil-market report, which covers the period to 2024.

International Brent crude oil futures were at $66.93 a barrel at 0039 GMT, up 26 cents, or 0.4 percent, from their last close.

Oil prices rose on Wednesday, buoyed by an official forecast showing slower-than-expected US production, and as USA sanctions stall exports from Venezuela.

America will add 4m barrels per day (bpd) of oil, mostly from the prolific Permian Basin in Texas.

Both benchmark crudes have climbed for three straight days and are near four-month highs.

USA crude stocks fell last week as refineries hiked output, the Energy Information Administration (EIA) said. Six analysts polled by Reuters estimate they rose 2.9 million barrels last week.

Other EIA data showed US crude output edged down from a record high, dropping 100,000 barrels per day (bpd) to 12 million bpd last week.

Venezuela's opposition-run congress on Monday declared a "state of alarm" over a five-day power blackout that has crippled the country's oil exports and left millions of citizens scrambling to find food and water.

USA oil output, including natural gas liquids and other hydrocarbons, will climb to 19.6 million bpd by 2024 from 15.5 million previous year, the Paris-based agency said.

The terminal resumed operations by Wednesday, according to two sources and Refinitiv Eikon data, but shipments have not started up.

Saudi Arabia, seeking to drain a supply glut and support prices, plans in April to keep its oil output well below the level required of it as part of an OPEC-led supply cutting deal, a Saudi official confirmed on Monday. USA crude shipments are projected to stand at 8.93 million barrels a day in five years - just 0.59 million less that Riyadh, and 0.24 million barrels more than Moscow.

Oil prices have also received support from supply cuts led by the Organization of the Petroleum Exporting Countries and allies including Russian Federation.

Traders also pointed to the political and economic crisis in OPEC-member Venezuela as a driver for oil prices.

Saudi Energy Minister Khalid al-Falih told Reuters two days ago that it would be too early to change a production curb pact agreed by the Organisation of Petroleum Exporting Countries (OPEC) and its allies, which includes Russian Federation, another major producer, before June.

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