OPEC Oil Output Falls in March on Saudi Cuts, Venezuela Blackouts

04 April, 2019, 05:56 | Author: Gerard Cortez
  • Oil prices climbing towards five-month high

"That, I think, is where we're headed", the official said. Both benchmarks are up week on week and represent new highs for 2019 as USA output saw small declines and global inventories appear to have abated somewhat.

Meanwhile, WTI is now trading at $62.84 per barrel, having hit a four-month high of $62.89 soon before press time.

That country's energy ministry disclosed on Tuesday that production at the end of March was 190,000 barrels per day (bpd) below October levels, smaller than the 228,000 bpd cut originally pledged.

Crude advanced for a third day after a further reduction in supply from Opec signaled that global markets are tightening.

On the supply front, booming American production has steadied, with the US government reporting on Friday that domestic output in the world's top crude producer edged lower in January to 11.9 million barrels per day.

Data provided by the Energy Information Administration said crude inventories added 7.2 million barrels to 449.5 million barrels in the week ended March 29, leaving them at the five-year average, this followed the American Petroleum Institute's late Tuesday report of a 3 million barrel rise in inventories.

West Texas Intermediate for May delivery climbed 75 cents to $62.34 a barrel at 12:22 p.m. on the New York Mercantile Exchange, after earlier rising to as high as $62.50 a barrel.The WTI prompt spread traded at a discount of 5 cents, signaling a narrowing contango, a market structure where contracts in the near term are cheaper than those further out.

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New of oil supply tumbling comes as three of eight countries granted waivers by the United States to import oil from Iran have cut the imports to zero, a USA official said.

"The psychologically important $70 a barrel threshold has proved a tough nut to crack for the Brent benchmark over the past few weeks", PVM oil broker Stephen Brennock said.

In December, OPEC member states and allied oil-producing nations, including Russian Federation, had agreed to curtail daily output of crude to help stop oil prices from sliding further downhill.

"We assume that OPEC crude oil production will average 30.1 million bpd in 2019. down from 31.9 million bpd in 2018", BNP Paribas said in a note, reducing an earlier forecast for this year by 200,000 bpd.

Figures showing a rebound in United States factory activity in March and a return to growth in Chinese manufacturing eased concern that an economic slowdown could weaken oil demand.

The deal between OPEC and non-OPEC oil producing countries, first signed in 2017, is supposed to prevent a crisis due to sliding oil prices, which have continued and picked up pace late past year.

Positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks also boosted sentiment, helping buoy regional stockmarkets.

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