Oil nears 2019 highs spurred by OPEC production cuts

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As output surges, US oil stocks are also rising.

"Balancing the market, i.e. aligning the somewhat uncertain global demand growth and the somewhat erratic US sanction policies toward Iran and Venezuela with the shale boom, rests on Saudi Arabia and its allies", said Carsten Menke, commodities research analyst at Julius Baer.

US crude oil stockpiles rose for a fifth straight week to the highest in more than a year, as production hit a record high and seasonal maintenance kept refining rates low last week, the Energy Information Administration said.

Gains dropped because the United States reported its crude output hit a record 12 million barrels per day (bpd), and its exports increased.

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

"The U.S. -China trade talks boosted prices with the promise of higher energy demand if global growth gets back on track", said Alfonso Esparza, senior market analyst at OANDA. Yesterday, the market was rather dead, volume was low and USA data on crude and products was mixed, so the market didn't really react, "Olivier Jakob of Petromatrix consultancy said". That makes it "the only country ever to reach this milestone", said Stephen Brennock, analyst at brokerage PVM Oil Associates Ltd.

Both oil benchmarks have risen this year after the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, began to cut output to prevent a supply glut from growing.

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Oil prices were firm on Friday, supported by OPEC's ongoing supply cuts and hopes that Washington and Beijing may soon end their trade dispute.

US West Texas Intermediate (WTI) crude oil futures were at $56.84 per barrel, down 12 cents, or 0.2 percent, from their last settlement.

The nation shipped out just over 3.6 million barrels a day in the week through February 15, according to the U.S. Energy Information Administration.

"Oil markets are buoyant on the expected impact of Saudi output cuts, sanctions on OPEC nations Iran, and Venezuela, and optimism in China trade talks", he said.

The Saudi Arabia-led organisation agreed near the end of past year, alongside non-OPEC producers like Russian Federation to curtail oil production by 1.2 billion barrels a day in an effort to stop the commodities decline in price which had been in freefall throughout the latter half of 2018.

Goldman Sachs said in a note that it expects Opec output to average 31.1-million bpd in 2019, down from 31.9-million bpd. Goldman said it expected an average Brent price of $60-$65 per barrel in 2019 and 2020.