OPEC cuts oil production in February despite pressure from Trump

Lloyd Doyle
March 15, 2019

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

According to Reuters, now the Iraqi state oil marketing company is also emboldened to trade the Iraqi crude on its own as the market for sour and heavy crude grades is tightening amid OPEC's cuts and the USA sanctions on Iran and Venezuela.

The Energy Information Administration said Wednesday that USA crude inventories fell by 3.9 million barrels in the week to March 8.

USA supplies dropped more than expected said the EIA.

Oil prices edged higher on Wednesday, supported by planned cuts to Saudi exports and a reduced forecast for USA crude output.

OPEC sources have said an extension of the supply-cutting pact is the likely scenario.

Ongoing supply cuts led by OPEC as well as the USA sanctions against Venezuela and Iran also offered some support. The group will discuss this at a meeting in April, although top exporter Saudi Arabia has said a decision may not be made until another gathering in June.

Overall Opec output fell by 221,000 bpd month-on-month to 30.55 million bpd. That amounts to 105 per cent compliance with pledged cuts, according to a Reuters calculation, up from January's rate.

Despite the new curbs, market indicators followed by Opec will prolong concerns about excess supply.

The US Petroleum Institute said Tuesday that crude oil stocks in the United States unexpectedly fell last week, while gasoline stocks fell and distillate stocks increased.

Meanwhile, U.S. sanctions against Venezuela as well as Iran have further tightened oil markets.

For 2020, the government said it expected United States crude oil demand to rise by 220,000 bpd to 21.03 million bpd, unchanged from previous forecasts.

The Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies such as Russian Federation - known as the OPEC+ alliance - pledged to withhold 1.2 million barrels per day (bpd) in crude supply from the start of the year to tighten markets and prop up prices.

International Brent crude oil futures were at $67.61 a barrel at 0054 GMT, up 6 cents, or 0.1 percent, from their last close.

International Brent crude oil futures were at $67.37 US a barrel, up 70 cents, or 1.1%, from their last close.

"With the refiners starting to slowly come out of maintenance, OPEC cuts starting to kick in, and Venezuelan supplies, you're probably now looking at a future with more draws in the coming weeks", said Phil Flynn, analyst at Price Futures Group in Chicago.

Other reports by Iphone Fresh

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