Cuts in OPEC and US sanctions in the headlines

Essam Al-Sudani | Reuters

The flames emerge from a pipeline in the oilfields of Basra, southeast of Baghdad, Iraq, on October 14, 2016.

Oil prices edged down Wednesday to reach their highest level in five months, thanks to the steady reduction in producers' club supply, OPEC and US sanctions, against oil exporters, Iran and Venezuela.

Brent's international futures were $ 70.83 per barrel at 0056 GMT, up 22 cents (0.3%) from their last close.

The West Texas Intermediate (WTI) crude oil futures price was $ 64.26 per barrel, up 28 cents or 0.3% from their latest settlement.

Both targets reached their highest level in five months on Tuesday before easing worries about global growth and worries about an increase in Russian supplies.

The US oil markets were tightened this year by US sanctions against oil exporters, Iran and Venezuela, as well as by cuts in the stocks of the producers' club of the Organization of the Petroleum Exporting Countries (OPEC). ) and some unaffiliated producers, a group known as OPEC +.

As a result, Crude and WTI crude oil futures have increased by approximately 40% and 30% respectively since the beginning of the year.

"The global oil market is clearly returning to equilibrium, thanks to OPEC + production cuts." OPEC production has dropped 1.98 million barrels a day. compared to the level of October, "said ING Bank in a note.

The Dutch bank said the reduction was not only a result of voluntary cuts in supply, as the group started this year to drive up prices.

"Venezuelan oil production would have risen from 1.19 million barrels per day in October to 890,000 barrels per day in March, while Iran's output would have risen from 3.33 million barrels per day to 2.71 million barrels. per day due to sanctions, the decreases attributable to these two exempt countries represent nearly 47% of OPEC, "said ING.

Despite the reductions made by OPEC, not all regions are in short supply.

Oil production in the United States has increased by more than 2 million barrels per day since early 2018, reaching a record 12.2 million bpd.

"The WTI has not seen the same strength (as Brent) … considering the relatively more bearish fundamentals in the US market," said ING Bank.

"US stocks of crude oil remain stubbornly high," the statement said.

US stocks of crude increased by 4.1 million barrels in the week to April 5, reaching 455.8 million barrels, industry data from The Industrial Group reported on Tuesday. American Petroleum Institute.