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© Reuters. FILE PHOTO: Storage tanks are seen on the oil drilling rig of Ecopetrol in Castilla, Castilla La Nueva
By Henning Gloystein
SINGAPORE (Reuters) – Oil prices hit their highest level since November 2018, driven by OPEC's ongoing offer cuts, US sanctions against Iran and Venezuela, and solid data on US employment.
International futures were $ 70.72 per barrel at 2:25 am GMT Monday, up 38 cents or 0.5% from their last close.
US WTI (West Texas Intermediate) crude rose 37 cents, or 0.6%, to $ 63.45 per barrel.
Brent and WTI both reached their highest level since last November, at $ 70.76 and $ 63.48 per barrel, respectively, early Monday.
"Brent prices have risen more than 30% since the beginning of the year, with OPEC + continuing to reduce supply for four consecutive months and the optimism generated by trade negotiations between China and China helped improve demand prospects, "US bank JPMorgan said in a note over the weekend.
The Organization of the Petroleum Exporting Countries (OPEC) and unaffiliated allies such as Russia, known as OPEC +, have pledged to retain about 1.2 million barrels per day of oil. supply to support prices.
Energy consulting firm FGE said the OPEC supply cuts meant that "the surplus stocks are disappearing and the market looks healthy," adding that "the market is ready for this." that prices go up to $ 75 a barrel or more "for Brent.
Traders said the good US jobs data released on Friday also helped Asian markets get up early on Monday.
Oil prices were further pushed up by sanctions imposed by the United States on Iran and Venezuela, members of OPEC.
"Sanctions can reduce Venezuelan exports by 500,000 barrels a day, plus a reduction in Iran's exemptions and substantial price increases," said FGE.
However, there are still some factors that could drive down prices later this year.
Russia is a reluctant participant in its agreement with OPEC to suspend production. Russian oil production could rise again if the agreement with the producers' club was not extended after its expiration before July 1, said Friday the Minister of Energy, Alexander Novak.
Russian oil production hit a record 556 million tonnes, or 11.16 million barrels a day last year.
In the United States, crude oil production reached a record 12.2 million bpd at the end of March.
exports also increased, crossing the 3 million bpd mark for the first time earlier this year.
"With the new Permian pipelines (from July), we can see an increase of 500,000 to 600,000 b / d in US exports," said FGE.
The health of the world economy remains a concern, especially if China and the United States can not resolve their trade dispute in the near future.
"World (commercial) demand is weakened and existing tariffs on Chinese goods shipments to the US are an additional drag," Moody's rating agency said Monday, adding that Chinese monetary stimulus is likely to support growth by 2019.
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