Oil reaches 4-month highs
Brent and West Texas Intermediate crude oil futures hit 4-month highs on Thursday as a production curb agreement by OPEC and its partners, together with the US sanctions against Iran and Venezuela, have cut the global supply.
An unexpected dip in U.S. crude oil inventories and production also supported prices, traders said.
Brent crude oil futures hit a 2019-peak of $68.14 per barrel on Thursday before easing modestly to $67.05 by 0840 GMT, up 50 cents or 0.74% from Wednesday’s close.
U.S. West Texas Intermediate (WTI) crude futures were at $58.62 per barrel, up 36 cents, or 0.62%, from their last settlement.
“With OPEC’s cuts in full-swing … persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported,” said Jasper Lawler, head of research at futures brokerage London Capital Group.
The Organization of Petroleum Exporting Countries (OPEC) and some non-aligned producers, including Russia, have been withholding oil supplies since the beginning of the year to tighten world markets and support crude prices.
In Venezuela, oil production and exports have been interrupted by a political and economic crisis that has led to a massive blackouts and supply shortages while Washington barred US companies from doing business with the Venezuelan government, including the state-owned oil company PDVSA.
In addition to the turmoil, two storage tanks exploded at a heavy-crude upgrading project in eastern Venezuela on Wednesday, according to an oil industry source and a legislator.
In the Middle East, the United States aims to cut crude oil exports of Iran by about 20% to less than 1 million barrels per day from May, demanding importing countries to cut purchases to avoid US sanctions.
Meanwhile, the US Energy Information Administration (EIA) weekly report says US commercial crude oil have dropped last week after the refineries have risen.
U.S. crude oil production also dipped, dropping by 100,000 barrels per day (bpd) to 12 million bpd.
In China official statistics show that the use of refinery crude oil from has made a record. However, oil prices could also be under pressure from an economic downturn.
Industrial production growth in China fell to a 17-year low of 5.3% in the first two months of the year, official data shows on Thursday pointing to further weaknesses in the world’s second-largest economy and the largest importer of crude oil.