Published: Thu, March 14, 2019
Economy | By

Oil prices rise on ongoing OPEC-led supply cuts

Oil prices rise on ongoing OPEC-led supply cuts

The IEA's forecast came just a few weeks after the United States exported a record 3.6 million barrels of crude oil on a daily basis, with the country being also a major exporter of petroleum products including refined fuels.

International Brent crude oil futures were at $66.85 a barrel at 0341 GMT, up 18 cents, or 0.3 percent, from their last close.

Oil prices rose on Wednesday, buoyed by an official forecast showing slower-than-expected US production, and as USA sanctions stall exports from Venezuela.

Saudi Arabia has voluntarily cut its supply by more than the deal requires and in April will keep output well below 10 million barrels per day (bpd), the Saudi official said - less than the 10.311 million bpd that the kingdom had agreed to pump.

Both benchmarks settled at their highest levels since mid-November.

USA crude stocks also fell unexpectedly last week, the American Petroleum Institute said on Tuesday, as supply from various producers was being curbed.

Crude inventories fell by 3.9 million barrels in the last week, compared with analysts' expectations for an increase of 2.7 million barrels.

The story that has been underpinning prices is the OPEC-led supply cuts that have been trimming about 1.2 million barrels per day since January 1.

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US oil output, including natural gas liquids and other hydrocarbons, will climb to 19.6 million bpd by 2024 from 15.5 million past year, the Paris-based agency said.

Other EIA data showed USA crude output edged down from a record high, dropping 100,000 barrels per day (bpd) to 12 million bpd last week.

The terminal resumed operations by Wednesday, according to two sources and Refinitiv Eikon data, but shipments have not started up.

Crude rallied this year after the Organisation of the Petroleum Exporting Countries (OEPC) and its allies including Russian Federation, a group known as OPEC+, returned to supply cuts as of January 1.

India has already built 5.33 million tons of underground reserves in three locations, which can meet 9.5 days of the country's oil needs.

"I expect to see WTI hitting $60 a barrel in the next couple of weeks as inventories in the US are impacted by the lack of Venezuelan imports", said Andrew Lipow, president of Lipow Oil Associates in Houston.

According to an annual five-year outlook report by the International Energy Agency, the U.S. became the world's top oil producer in 2018, and is set to become the world's biggest oil exporter over the next five years.


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