Oil hits 4-month high after second straight weekly gain

Cornelia Mascio
Marzo 17, 2019

The power crisis in the South American country that disrupted crude exports this week could return or worsen, threatening 1.2 million barrels per day (bpd) of oil supplies, or more than one-percent of global output. "The OPEC-plus meeting could give us a little direction", he said.

The U.S. bank said January global crude oil demand growth was "nearly 2.0 million barrels per day, with strength visible in both emerging markets and developed economies".

Two sources told Reuters that the United States also aims to curb Iran's crude exports by about 20 percent to below 1 million barrels per day (bpd) from May, likely reining in waivers for Tehran's remaining customers.

The International Energy Agency yesterday reported that Opec's February crude production fell to a four-year low. "United States sanctions on Venezuelan petroleum products have cemented support for oil prices", said Benjamin Lu of Singapore-based brokerage Phillip Futures.

"OPEC's compliance was a robust 94 percent, compared to 51 percent from non-OPEC", said the IEA, adding that major producer Russian Federation was continuing to adjust its production gradually.

BNP Paribas strategist Harry Tchilinguirian told the Reuters Global Oil Forum: "Buyers with (Iran oil) waivers are likely going to hold back until there is more clarity in the US administration's position". We will observe the economic-political consequences of the USA cornering Saudi Arabia, Iran and Venezuela in the global oil game.

"Much of this spare capacity is composed of crude oil similar in quality to Venezuela's exports", said the agency.

With production in Canada also increasing, and most of its exports moving to U.S. refineries, more USA crude should be available for export.

The agency also said rising USA output was providing comfort to world markets.

The National Bank of Australia said the outlook for the oil market was mixed because there were downside risks to prices due to concerns about economic growth and strong growth in USA supply, while the cutbacks in OPEC declined and the United States imposed sanctions on Iran and Venezuela.

Futures advanced 4.4 per cent this week in NY and settled Friday just pennies off a four-month high, reported Bloomberg. The report states that daily USA export capacity during the period in question will pass Russia's and get close to Saudi Arabia's with 9 million barrels.

Venezuela produces about 1.2 million barrels of oil a day when operating normally, said the IEA.

In a Financial Times news article, according to market research firm Rystad Energy's predictions, we will experience a 2019 where very shocking changes that would not have come to mind will take place in the global energy market. Involuntary production declines from the coalition's members including Venezuela and Iran have further squeezed supplies.

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