OIL PRICE: ABOVE $70 ANEW
REUTERS - Oil prices edged back towards five-month highs on Wednesday, supported by ongoing supply cuts by producer club OPEC and U.S. sanctions against oil exporters Iran and Venezuela.
International benchmark Brent futures were at $70.83 per barrel at 0056 GMT, up 22 cents, or 0.3 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures were at $64.26 per barrel, up 28 cents, or 0.3 percent, above their last settlement.
Both benchmarks hit five-month highs on Tuesday, before easing on global growth worries and concerns about a rise in Russian supplies.
Oil markets have been tightened this year by U.S. sanctions on oil exporters Iran and Venezuela, as well as supply cuts by the producer club of the Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated producers, a group known as OPEC+.
As a result, Brent and WTI crude oil futures have risen by around 30 percent and 40 percent respectively since the start of the year.
"The global oil market is clearly moving back towards balance thanks to OPEC+ production cuts. OPEC production has fallen 1.98 million barrels per day (bpd) from October levels," ING bank said in a note.
The Dutch bank said the reduction was not only down to voluntary supply cuts, which the group started this year to prop up prices.
"Venezuelan oil output is estimated to have fallen from 1.19 million bpd in October to 890,000 bpd in March, while output from Iran has fallen from 3.33 million bpd to 2.71 million bpd due to sanctions. Declines from these two exempt countries account for almost 47 percent of the reduction seen from OPEC," ING said.
Despite the OPEC-led cuts, not all regions are in tight supply.
Oil production in the United States has risen by more than 2 million barrels per day since early 2018, to a record 12.2 million bpd.
"WTI has not seen the same strength (as Brent)... given the relatively more bearish fundamentals in the U.S. market," said ING bank.
"U.S. crude oil inventories remain stubbornly high," it added.
U.S. crude stocks rose by 4.1 million barrels in the week to April 5, to 455.8 million barrels, data from industry group the American Petroleum Institute showed on Tuesday.
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Oil prices rose to their highest level since November 2018 on Monday, driven upwards by OPEC’s ongoing supply cuts, U.S. sanctions against Iran and Venezuela, fighting in Libya as well as strong U.S. jobs data.
Oil prices fell on Friday, with Brent slipping away from the $70 mark reached the previous day, pulled down by worries about progress in the U.S.-China trade talks.
Oil prices rose for a fourth day on Wednesday, pushing Brent towards $70 a barrel as support from OPEC-led supply cuts and U.S. sanctions overshadowed a report showing an unexpected rise in U.S. inventories.
Oil prices rose on Monday, adding to gains in the first quarter when the major benchmarks posted their biggest increases in nearly a decade, as concerns about supplies outweigh fears of a slowing global economy.
Oil prices rose on Friday on the back of ongoing OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, putting crude markets on track for their biggest quarterly rise since 2009.
Oil prices were mixed on Wednesday, with Brent extending the previous session’s rise, but gains were kept in check amid growing fears over the impact of a global economic slowdown on demand.
Oil prices slipped on Monday, with concerns of a sharp economic slowdown outweighing supply disruptions from OPEC’s production cutbacks and from U.S. sanctions on Iran and Venezuela.
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