LONDON: Brent and West Texas Intermediate crude oil futures reached four-months highs on Thursday, as a production curb agreement by Opec and its partners along with US sanctions on Iran and Venezuela tightened global supplies. An unexpected dip in US 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 per cent from Wednesday’s close.
US West Texas Intermediate (WTI) crude futures were at $58.62 per barrel, up 36 cents, or 0.62 per cent, 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 the Petroleum Exporting Countries (OPEC) and some non-aligned producers including Russia have been withholding oil supply since the start of the year to tighten global markets and prop up crude prices.
In Venezuela, oil production and exports have been disrupted by a political and economic crisis that has caused massive blackouts and supply shortages, while Washington has barred US companies from doing business with the Venezuelan government, including state-owned oil firm PDVSA.
Adding 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 Iran’s crude exports by about 20 per cent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid US sanctions, two sources familiar with the matter told Reuters. Meanwhile, a weekly report by the US Energy Information Administration (EIA) said US commercial crude oil inventories fell last week as refineries hiked output.
US crude oil production also dipped, falling by 100,000 barrels per day (bpd) to 12 million bpd.
In China, official statistics showed refinery crude oil use hit a record. Still, oil prices could also come under downward pressure from an economic slowdown. — Reuters
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