🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

Oil ticks over near 2019 highs amid OPEC cuts, but economic slowdown applies brakes

Published 02/20/2019, 10:01 PM
© Reuters. FILE PHOTO: An oil pump jack pumps oil in a field near Calgary
BARC
-
LCO
-
CL
-

By Henning Gloystein

SINGAPORE (Reuters) - Oil prices hovered close to 2019 highs on Thursday, bolstered by OPEC-led supply cuts and U.S. sanctions on Venezuela and Iran, but were prevented from rising further by slowing growth in the global economy.

U.S. West Texas Intermediate (WTI) crude oil futures were at $57.33 per barrel at 0256 GMT, 17 cents, or 0.3 percent, above their last settlement, but below their 2019 high of $57.55 reached the previous day.

International Brent crude futures were at $67.14 per barrel, 6 cents above their last close and not far off their 2019 peak, hit the day before, of $67.38 per barrel.

Analysts said that a global economic slowdown was preventing prices from surging beyond the 2019 highs seen this week.

"Slowing economic growth will invariably lead to weakness in fuel consumption thus eroding bullish gains for oil prices," said Benjamin Lu of brokerage Phillip Futures in Singapore.

Despite the slowdown in economic growth that emerged in late 2018, oil prices have been driven up this year by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC, as well as some non-affiliated producers such as Russia, agreed late last year to cut output by 1.2 million barrels per day (bpd) to prevent a large supply overhang from growing.

Another price driver has been U.S. sanctions against oil exporters Iran and Venezuela.

"Although there is no lack of resources, there is an increasing lack of access to them," Britain's Barclays (LON:BARC) bank said of the sanctions on Wednesday.

The main factor keeping oil prices from rising even further is soaring U.S. oil production, which rose by more than 2 million bpd last year, to a record 11.9 million bpd.

The swelling output has resulted in rising U.S. oil inventories.

U.S. crude oil stocks rose by 1.3 million barrels in the week to Feb. 15 to 448.5 million, according to a weekly report by the American Petroleum Institute on Wednesday.

© Reuters. FILE PHOTO: An oil pump jack pumps oil in a field near Calgary

Official oil inventory and production data is due to be published by the U.S. Energy Information Administration (EIA) after 1800 GMT on Thursday.

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.