SINGAPORE (Reuters) – Oil prices peaked around 2019 on Wednesday, buoyed by supply cuts led by the OPEC producer club and by US sanctions against Iran. and Venezuela.
FILE PHOTO: A pump plug is seen at sunrise near Bakersfield, California on October 14, 2014. REUTERS / Lucy Nicholson / File Photo
But soaring US production and expectations of a slowing economy may cap prices, analysts said.
WTI (West Texas Intermediate) crude oil futures hit 2019 highs of $ 56.39 a barrel shortly after 3:00 am GMT on Wednesday, up 30 cents (0.5%) from their latest settlement.
Futures contracts on international Brent were at $ 66.58 per barrel, up 13 cents (0.2%) from their last close price and close to their peak of $ 669 per barrel in 2019. on Monday.
Oil prices were supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
OPEC member Saudi Arabia, the largest exporter of crude oil, is expected to reduce its light crude oil shipments to Asia in March as part of tightening markets.
OPEC and some unaffiliated producers, such as Russia, agreed late last year to reduce production by 1.2 million barrels per day to avoid a significant swelling of the stock.
"We have reduced Saudi crude oil production according to the announcements … (and) now suppose that Saudi Arabia will produce in the first three quarters of 2019 less than the target of 10.31 million barrels a day that he had agreed at the OPEC December 7, non-OPEC meeting, "said the French bank BNP Paribas in a note.
As a result of these reductions, the NPP expected oil prices to "go back to the third quarter of 2019", with Brent averaging $ 73 per barrel at that date and WTI at $ 66 a barrel. on average.
The sanctions imposed by the United States on oil exporters, Iran and Venezuela, were another determinant of oil prices.
Despite sanctions, Iran's crude exports exceeded expectations in January, averaging around 1.25 million barrels per day, according to Refinitiv's ship tracking data. Many analysts were expecting Iran's oil exports to drop below one million bpd after US sanctions were imposed last November.
SHALE BOOM, LOW ECONOMY
US crude oil production, which increased by more than 2 million bpd in 2018, reached a record 11.9 million bpd in 2018, thanks to the explosion in shale oil production that, according to the Energy Information Administration, is expected to continue to increase.
BNP Paribas said the rise in US production would result in a decline in oil prices towards the end of the year, with Brent dipping to an average of $ 67 per barrel in the fourth quarter and WTI to $ 61 on average.
"US Oil shale-driven growth in oil production will be increasingly exported to international markets, while the global economy is expected to experience a synchronized slowdown in growth," the bank said.
Report by Henning Gloystein; Edited by Joseph Radford and Richard Pullin