Venezuela's Maduro asks OPEC help against US oil sanctions

Marco Green
February 12, 2019

Oil prices gained about 1 percent on Tuesday, supported by OPEC-led production cuts and US sanctions against Iran and Venezuela, though remain wary of surging USA output and the outcome of U.S.

The third key reason for Middle Eastern sour crude to trade higher than Brent is the uncertainty over whether the USA will extend waivers (if any) to Iran's oil buyers when the current exemptions expire in early May.

International Brent crude futures had yet to trade.

The moderate growth is reportedly tied to the voluntary output cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its non-OPEC allies.

"We believe that oil is not pricing in supply-side risks lately as markets are now focused on U.S".

First, OPEC is now on a mission to cut supply again in a bid to rebalance the market and lift prices, and many OPEC producers do pump and cut from medium to heavy grades. "China trade talks, ignoring the risks now in place from the loss of Venezuelan barrels", USA bank J.P. Morgan said in a weekly note.

However, analysts are warning that record U.S. supply and anticipated economic slowdown later this year might start capping the world's oil markets.

USA bank Morgan Stanley said the surge in US crude oil production, which tends to be light in quality and which rose by more than 2 million barrels per day (bpd) past year to a record 11.9 million bpd, had resulted in overproduction of gasoline.

Three key factors have been tightening the global supply of heavy crude grades, thus pushing the prices of Dubai spot and DME Oman crude futures higher this month, traders and analysts tell Reuters.

Refining profits for gasoline have plunged since mid-2018, going negative in Asia and Europe, amid tepid demand growth and a surge in supply. The US and China are, and will continue to, discuss the trade impasse and it is possible that the March 1 could get pushed back if talks take a positive step forward.

Other reports by Click Lancashire

Discuss This Article

FOLLOW OUR NEWSPAPER