Oil rises 1% on tightening crude supply, upbeat economic data

Marco Green
April 15, 2019

However, global oil markets remain firm, amid Opec+ supply cuts, USA sanctions on oil exporters Venezuela and Iran and increased fighting in Opec member Libya.

USA sanctions and power outages pushed OPEC member Venezuela's crude output to a long-term low of 870,000 bpd, IEA says.

The IEA went on to dispel a closely-held worry of the crude analytical community by stating, "Tightness in the oil market.is not just a supply story: in recent months, the resilience of demand has received less attention".

"We believe global demand has another 10 million barrels bpd of growth, with over half from China", Bernstein Energy said in a note on Thursday.

Brent and WTI have risen by around 30 and 40 percent respectively since the start of the year. Demand for OPEC crude in 2018 averaged 31.35 million bpd.

OPEC and its allies are expected meet in June to decide whether to continue withholding supply.

US energy companies this week increased the number of oil rigs operating for a second week in a row, bringing the total count to 833, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.

Russian Federation and OPEC may decide to boost production to fight for market share with the United States but this would push oil prices as low as $40 per barrel, TASS news agency сited Russia's Finance Minister Anton Siluanov as saying on Saturday.

The kingdom also self-reported production of 9.79 million bpd, its lowest since January 2017 and a fall of 350,000 bpd month on month.

On Thursday, the 11th of April 2019, both USA 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.

In 2018 OPEC+ made a decision to increase output at its mid-year meeting, only to return to production cuts in 2019. The dollar index slipped to its lowest against the euro in more than two weeks, making crude cheaper for non-U.S. buyers.

Iraq's production fell marginally to 4.52 million bpd in March, slightly above its quota of 4.51 million bpd, according to OPEC secondary sources.

Other reports by Click Lancashire

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