NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

Oil dips from four-month highs, but OPEC cuts, sanctions support

Published 03/21/2019, 03:24 AM
Updated 03/21/2019, 03:26 AM
© Reuters. FILE PHOTO: Drilling rigs in the Cromarty Firth near Invergordon, Scotland
LCO
-
CL
-

By Henning Gloystein

SINGAPORE (Reuters) - Oil eased away from 2019 highs reached earlier in the session on Thursday, but markets remain relatively tight amid supply cuts led by producer club OPEC and U.S. government sanctions against Iran and Venezuela.

U.S. West Texas Intermediate (WTI) crude futures were at $60.12 per barrel at 0712 GMT on Thursday, down 11 cents, or 0.2 percent from their last settlement. WTI reached its highest level since Nov. 12 earlier in the day, at $60.33 per barrel.

International Brent crude oil futures were at $68.52 a barrel, close to their last settlement after hitting $68.69 a barrel earlier in the session, the highest since Nov. 13.

Crude prices have been pushed up by almost a third since the start of 2019 by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), as well as by sanctions enacted against Iran and Venezuela by the United States.

OPEC's crude oil output has slumped from a mid-2018 peak of 32.8 million barrels per day (bpd) to 30.7 million bpd in February.

(For a graphic on 'OPEC oil production' click https://tmsnrt.rs/2FiS2y3)

The U.S. sanctions are also disrupting supply.

"Venezuelan exports to the U.S. have finally dried up, after the sanctions were placed on them by the U.S. administration earlier this year," ANZ bank said on Thursday.

Iranian oil exports have also slumped. The United States aims to cut Iran's crude exports by about 20 percent to below 1 million bpd from May by requiring importing countries to reduce purchases to avoid U.S. sanctions.

The OPEC cuts and sanctions have also tightened supply within the United States.

U.S. crude oil stockpiles last week fell by nearly 10 million barrels, the most since July, boosted by strong export and refining demand, the Energy Information Administration said on Wednesday.[EIA/S]

Stockpiles fell 9.6 million barrels, to 439.5 million barrels, their lowest since January.

Part of the drawdown is due to surging U.S. exports, which stood at a four-week average of 3 million bpd, double the amount this time a year ago, according to the EIA.

The rising exports come amid steep growth in U.S. crude oil production, which returned to its record of 12.1 million bpd last week, making America the world's biggest producer ahead of Russia and Saudi Arabia.

© Reuters. FILE PHOTO: Drilling rigs in the Cromarty Firth near Invergordon, Scotland

(For a graphic on 'U.S. crude oil production & exports' click https://tmsnrt.rs/2ULQiTd)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.