Oil prices rise after OPEC cuts, United States sanctions on Iran, Venezuela

  • Oil prices rise after OPEC cuts, United States sanctions on Iran, Venezuela

Oil prices rise after OPEC cuts, United States sanctions on Iran, Venezuela

But ahead of that, the oil rig count has to be supportive.

"We maintain our forecast of 1.4 Mmbpd (in 2019 oil demand growth), but accept that there are mixed signals about the health of the global economy, and differing views about the likely level of oil prices", IEA said.

U.S. West Texas Intermediate crude at Midland yesterday traded at the biggest discount to futures in nearly four months after Phillips 66 closed a unit for maintenance at its Borger, Texas refinery, adding to a backlog of barrels as production climbs. WTI whit a high of $64.79 going back to November 1 earlier this week.

U.S. West Texas Intermediate crude futures settled 31 cents higher at $63.89 per barrel on Friday, rising half a percent on the day and posting a 1.3% weekly gain.

For the week, both benchmarks were up almost 2% each.

Libya, which is also exempt from the deal, pumped 1.098 million bpd in March, up 196,000 bpd from the previous month, but output remains at risk as the country is on the brink of a possible civil war.

The International Energy Agency said on Thursday that Venezuelan crude production has dropped below 1 million bpd to 870,000 bpd due to USA sanctions, and Iranian supply could fall further after May if Washington tightens its sanctions against Tehran, as many experts anticipate. But after an early blitzkrieg, the warlord's advances seem to have slowed.

Russian Federation is also ready to boost supplies.

Russian President Vladimir Putin's remarks this week that Moscow was against "uncontrollable oil price increases" was also a red flag to Jakob.

The group forecasts U.S. crude production to rise by 1.46 million bpd in 2019 to 12.42 million bpd.

OPEC could raise oil output from July if Venezuelan and Iranian supply drops further and prices keep rallying, because extending production cuts with Russian Federation and other allies could overtighten the market, sources familiar with the matter said. OPEC has said the curbs must remain, but there are signs that stance is now softening. Russia's breakeven price for oil is around $42 per barrel, while the Saudis need the market to be at around $84 to fund their national budget.

The OPEC and partners such as Russian Federation decided earlier on a production limitation in order to support the prices.

Prices plunged on Thursday as traders continued to react to rising USA inventories.

"We think that the Russian comments of this week are a sign that we are starting to approach this zone of divergence of interest (with Saudi Arabia), which will make it hard to maintain the OPEC+ agreement above current prices".