Oil Prices Jump Over 1 Percent Amid Tightening Supply

Lloyd Doyle
April 14, 2019

U.S. West Texas Intermediate (WTI) crude futures ended the session up 31 cents, or 0.5 percent, at $63.89 a barrel.

Prices also continue to be supported by the on-going OPEC-led supply cuts and the USA sanctions against Iran and Venezuela, which have helped tighten global supplies.

Oil markets are tightening amid the increasing effectiveness of US sanctions on Iran and Venezuela, the International Energy Agency said yesterday.

Production by OPEC countries in March was 2.2 million barrels per day (b/d) lower than in November and now there is uncertainty concerning Libya, said a report released by the International Energy Agency on Thursday.

The IEA noted that concerns over global oil supplies boosted crude oil futures in March.

Oil prices have recovered sharply since December, when they fell to a 15-month low, and ICE Brent has been trading a five-month high of above $71 per barrel this week.

Current oil demand stands around 100 million bpd.

On Thursday, the 11th of April 2019, both U.S. and United Kingdom crude fell more than one percent after sources had revealed that the OPEC, a 14-nation pact of petroleum exporting nations, had been giving a second thought over their production cut policy until the end of 2019.

On the demand side, Chinese data showed exports rebounded last month, driving USA and euro zone bond yields to three-week highs and helping offset weaker imports and reports of another cut in German growth forecasts.

The report also said that Angola was one of China's three largest oil suppliers, together with Saudi Arabia and Russian Federation, with shares of 11.3%, 15.2% and 14.6% in February, respectively.

OPEC also revised down non-OPEC oil supply growth in 2019 by 60,000 bpd "due to extended maintenance in Kazakhstan, Brazil and Canada".

The rig count fell for the past four months as independent exploration and production companies cut spending on new drilling to focus on earnings growth instead of increased output. The US crude output level remained at a record 12.2 million barrels per day (bpd).

Two days ago, OPEC reported Venezuela's March output sank to 732,000 bpd, citing independent sources, while figures provided by the country put production at 960,000 bpd.

Other reports by Iphone Fresh

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