Oil prices rise amid broad market rally, OPEC supply cuts

An oil tanker is seen at Jose refinery cargo terminal in Venezuela in this undated file photo. (REUTERS)
Updated 12 March 2019
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Oil prices rise amid broad market rally, OPEC supply cuts

  • Oil prices have been receiving broad support this year from supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia aimed at tightening market

SINGAPORE: Oil prices rose on Tuesday, lifted by healthy demand and output cuts led by producer group OPEC.
A rally in broader financial markets also supported crude futures, although analysts still warned of risks to the global economy.
US West Texas Intermediate (WTI) crude oil futures were at $56.97 per barrel at 0054 GMT, up 18 cents, or 0.3 percent, from their last settlement.
Brent crude futures were at $66.75 per barrel, up 17 cents, or 0.3 percent.
“(Despite economic headwinds), we still see Brent prices averaging $70 per barrel this year and expect WTI to lag, averaging $59 per barrel in 2019,” said Bank of America Merrill Lynch.
It said that was partly due to demand for marine diesel expected from next year as part of new fuel rules from the International Maritime Organization.
“With diesel yields already maxed out, refiners may need to lift runs in 2H19 to meet rising demand for marine distillates,” it said.
Oil prices have been receiving broad support this year from supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia aimed at tightening markets.
Traders also pointed to the political and economic crisis in OPEC-member Venezuela as a driver for oil prices.
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.

SURGING US OUTPUT
Offsetting OPEC efforts to tighten the market and disruptions like Venezuela is a surge in US oil supply.
The United States will drive global oil supply growth over the next five years, adding another 4 million barrels per day (bpd) to the country’s already booming output, the International Energy Agency said on Monday.
US crude oil output will rise nearly 2.8 million bpd, growing to 13.7 million bpd in 2024 from an average of just under 11 million bpd in 2018, the IEA said, making the United States by far the biggest oil producer in the world.
With US production booming, the country needs to import less and is increasingly turning abroad to sell surplus oil.
“The decrease in net crude oil imports (December, 2018) was driven primarily by lower imports from Saudi Arabia (down 160,000 bpd month-on-month) and higher exports to Asian countries such as South Korea (up 200,000 bpd month-on-month), China (up 90,000 bpd month-on-month) and India (80,000 bpd month-on-month),” Barclays bank said.


Iraq cuts oil exports in line with OPEC deal: minister

Updated 20 March 2019
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Iraq cuts oil exports in line with OPEC deal: minister

  • An OPEC meeting in Vienna in April would assess member states’ compliance with agreed production cuts
BAGHDAD, March 14 : Iraq has cut its oil exports average to 3.5 million barrels per day in compliance with an ongoing production curb agreement, its oil minister said on Thursday.
Thamer Ghadhban told reporters an OPEC meeting in Vienna in April would assess member states’ compliance with agreed production cuts and whether to extend the curbs until the end of the year.
Iraq is committed to the deal and working to stabilize markets, he said. (Reporting by Ahmed Rasheed; Writing by John Davison; Editing by Mark Potter)