Oil prices hit 2019 highs amid supply cuts, trade talk hopes

20 February, 2019, 05:11 | Author: Frank Williams
  • Oil price SURGE: Spike in price after US sanctions in Iran and Venezuela and OPEC cuts

A trade source, who is not authorized to speak to media, said International Olympic Committee signed the deal with Norwegian oil company Equinor which will supply a variety of us crude grades.

Oil was close to its 2019 high of nearly $67 a barrel on Tuesday, supported by OPEC-led supply cuts although gains were capped by concerns about slowing economic growth that could hit demand. During Monday's trading, halted at midday for the President's Day holiday, the WTI peaked at $56.33 and bottomed out at $55.72.

WTI Crude traded up 0.80 per cent at $56.43, while Brent Crude eased off earlier gains to trade down 0.02 per cent at $66.24.

Oil has risen almost 25 percent so far this year and is on course for its strongest first-quarter performance since 2011, thanks largely to a commitment by the Organization of the Petroleum Exporting Countries and allies to cut output.

Refiners around the world are also having to pay more to secure supplies of the medium, or heavy, sour crudes produced by Iran and Venezuela, both of which are under USA sanctions.

Financial markets, including crude futures, were also generally supported by hopes that the United States and China would soon resolve their trade disputes, which have dragged on global economic growth.

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The term deal will help cut IOC's dependence on OPEC crude, said Sri Paravaikkarasu, head of east of Suez oil for consultants FGE in Singapore.

"OPEC production cuts and US sanctions on both Iran and Venezuela are limiting supply". Recently, Saudi Arabia has suggested that they are going to cut production, and so far it seems to be working as far as price is concerned.

Prices have been bolstered by a tightening market because of supply cuts organized by the Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated producers like Russian Federation.

USA energy companies last week increased the number of oil rigs looking for new supply by three to a total of 857, energy services firm Baker Hughes said in a report last Friday.

At least partly offsetting supply falls has been a surge in U.S. crude oil production by more than 2 million bpd in 2018, to a record 11.9 million bpd.

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