Investing.com – Crude oil prices settled at nearly four-year highs as bets on disruptions to global crude supplies continued amid weaker production in Venezuela and expectations the U.S. will impose new sanctions against Iran.
On the New York Mercantile Exchange crude futures for June delivery rose $1.01, or 1.45%, to settle at $70.73 a barrel, while on London's Intercontinental Exchange, Brent rose 1.56% to trade at $76.04 a barrel.
The prospect of lower global oil supplies, pushed oil prices to their highest since late-2014 as Venezuela production continued to drop.
Venezuela’s oil output is expected to face further headwinds as U.S. Vice President Pence will announce new sanctions Monday on the South American country, Reuters said, citing an aide to Pence.
U.S. sanctions on Venezuela has kept a lid on investments in the country’s oil infrastructure, limiting oil output to just 1.488 million barrels per day in March from average output of 1.916 million barrels a day in 2017.
The plunge in Venezuela’s output comes as non-OPEC members continued to ramp up output, led by the United States. Data showed Friday the number of U.S. oil rigs rose for the fifth straight week.
Energy services firm Baker Hughes reported Friday the number of oil rigs operating in the US rose by 9 to 834, pointing to a further expansion in U.S. oil output.
Growing expectations that U.S. President Donald Trump will decide – on May 12 – to withdraw from the Iran nuclear deal also added support to oil prices.
New sanctions against Iran – the third-largest OPEC producer – would likely slash global supplies at a time when the country’s exports rose to a post-deal high, according to Bloomberg.
Iran crude shipments climbed to 2.48 million barrels a day last month from 2.06 million a day in March, Bloomberg said Tuesday, citing ship-tracking data.
Crude oil prices were also supported by comments from Khalid al-Falih, Saudi Arabia’s energy minister, saying OPEC and its allies would maintain output curbs until the end of 2018.
In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018.