Oil rises to $67 on cuts to Saudi, Venezuelan exports

Roman Schwartz
March 13, 2019

Oil prices rose on Wednesday, pushed up by ongoing supply cuts from producer cartel OPEC and US sanctions against Iran and Venezuela.

Drilling rigs are parked up in the Cromarty Firth near Invergordon, Scotland, Britain January 27, 2015.

U.S. West Texas Intermediate (WTI) crude oil futures were at $56.43 per barrel, up 36 cents, or 0.6 percent from their last close.

The US could overtake Russian Federation and Saudi Arabia as the world's top oil exporter by 2024, the International Energy Agency (IEA) has predicted.

Brent crude futures were at $65.04 per barrel, up 30 cents, or 0.5 per cent.

Crude oil prices rose marginally on Monday, driven by comments from Saudi Arabian oil minister, Khalid al-Falih, that an end to the Organisation of Petroleum Exporting Countries (OPEC)-led supply cuts was unlikely before June.

On Jan. 1, OPEC+ began new production cuts to avoid a supply glut that threatened to soften prices.

Oil prices edged slightly higher on Tuesday, supported by signs of tightening global supply after a Saudi official said the kingdom plans to cut oil exports in April, while the US government reduced its forecast for domestic crude output growth.

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

OPEC member United Arab Emirates (UAE) said on Sunday it would continue to meet its obligations to cut supply under the producer agreement.

In additional to the pledged output reduction, the crude oil markets have been getting an additional boost from the USA sanctions on Iran and Venezuela.

Venezuela's opposition-run congress on Monday declared a "state of alarm" over a five-day power blackout that has crippled the country's oil exports and left millions of citizens scrambling to find food and water. In February, US crude oil exports hit an all-time high, with shipments amounting to over 3.6 million barrels a day.

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

With a projected 2.3 million barrel of crude oil production per day and $60 oil benchmark in the 2019 budget, the rise in the oil prices, they say is healthy for the finance of the budget which has an unprecedented huge capital expenditure component.

The first report, from the American Petroleum Institute, an industry group, was due out 2030 GMT, followed by the government's official supply report on Wednesday.

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