Oil up on reduced U.S. output estimate, stalled Venezuelan exports

Lloyd Doyle
March 14, 2019

While OPEC members agreed to cut about 800,000 barrels, their non-OPEC allies led by Russian Federation resolved to cut their output by 400,000 barrels, in a bid to strengthen crude oil prices, tighten and stabilize the crude oil market.

Oil prices have been receiving broad support this year from supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russian Federation aimed at tightening markets.

US West Texas Intermediate (WTI) crude futures were at $57.17 per barrel, up 30 cents, or 0.5 percent, from their last settlement.

Brent crude futures settled at $67.55 a barrel, up 88 cents, or 1.32 percent.

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.

The resolution was to be subject to a review to either extend the cut by June, or discontinue after the monitoring team has reviewed the impact.

Markets have been further tightened by the implementation of US sanctions against oil exports from OPEC-members Iran and Venezuela.

"Downward revisions in global growth forecasts by OECD and European Central Bank have capped bullish gains", said Benjamin Lu of Singapore-based brokerage Phillip Futures. Now comes word that OPEC and its allies plan in April to keep its oil output well below the level pledged as part of its original deal.


Crude oil prices are expected to be underpinned throughout Tuesday's session as concerns over supply and renewed demand for risky assets are likely to remain supportive.

Saudi's participation in the Indian Strategic Petroleum Reserve program was discussed at a meeting between the kingdom's Energy Minister Khalid Al-Falih and his Indian counterpart Dharmendra Pradhan in New Delhi on Saturday, according to a government statement on Sunday.

"We will see what happens by April".

US crude stocks fell last week as refineries hiked output, the Energy Information Administration (EIA) said.

The United States could overtake Russian Federation and rival Saudi Arabia in terms of crude oil exports by 2024, according to a new forecast from the International Energy Agency.

A rally in broader financial markets also supported crude futures, although analysts still warned of risks to the global economy.

"This is the third straight week of decline...after a number of oil producers trimmed their spending outlooks for 2019", ANZ bank said on Monday.

Other reports by Iphone Fresh

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