Oil price surges amid OPEC cuts & USA sanctions against Venezuela

Share
Oil price surges amid OPEC cuts & USA sanctions against Venezuela

Supply cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, have been supporting prices.

US oil prices inched up on Tuesday, buoyed by expectations of tightening global supply due to USA sanctions on Venezuela and production cuts led by OPEC.

"The weekly report from the EIA on USA oil stocks was bullish for outright prices, plain and simple. Moreover, lower oil prices - prices were between 14 percent and 18 percent lower in January than their 2018 average - are likely to stimulate economic activity and oil demand, particularly in emerging markets", said Jean-Pierre Durante, Head of Applied Research at Pictet Wealth Management.

A report published by the US Energy Information Administration (EIA) last week showed that the country's oil production averaged a record 11.9 million barrels a day in November, up 345,000 from October and up almost 1.8 million compared with November 2017's average figures.

US West Texas Intermediate (WTI) crude futures were at $53.82 per barrel at 0607 GMT, down 19 cents, or 0.4 per cent, from their last settlement.

International Brent crude oil futures were down by 26 cents, or 0.4 per cent, at $62.43 per barrel.

About a dozen tankers carrying over 7 million barrels of Venezuelan crude and products were anchored this week at the U.S Gulf Coast waiting for directions on how to pay for the cargoes following the sanctions, according to Refinitiv Eikon data.

But for those who prefer to scrutinize the trading community, then get set for more wild price swings: that was the message delivered by Robert McNally, president of Rapidan Energy Group, who said, "In this boom-bust era, as in prior ones, you can have a year or two of stability, but in general when you don't have an effective swing producer and you have big imbalances and geopolitical risk, there's volatility".

According to EIA, total motor gasoline inventories in the country increased by 500,000 barrels last week, about 5 percent above the five-year average for this time of year.

Crude shipments to the USA from OPEC and its partners fell to 1.41 MMbpd in January, the lowest in five years, according to data from cargo-tracking and intelligence company Kpler.

Short-term, the market is getting a boost from USA sanctions on Venezuelan oil exports.

While OPEC and allied producers are slashing their output in an attempt to boost crude prices, which saw a rapid fall past year, the United States has been opposing the measure and vowed to continue expanding its supply.

US President Donald Trump said in his State of the Union address that a trade deal was possible with China.

Share

Advertisement

Related Posts

Nikkei Newspaper: Nintendo to Offer Smaller Switch Console
Mario World is targeting an early summer 2019 global release, including in Japan and the United States". Nintendo has confirmed that the launch of Mario Kart Tour has been pushed back to this summer.

Trump Says Trade War Deal Must Involve 'Real, Structural Change'
A common concern is the unavoidable impact that trade disputes will have on the still fragile global economy. In response, China imposed tit-for-tat tariffs on billions of dollars worth of American imports.

OPEC's oil exports to USA fell to five-year low in January
Global benchmark Brent crude dropped almost 1% to $61.39 a barrel while WTI futures were down more than 1% at $53.12 a barrel. The producers' alliance, known as OPEC+, began cutting production from last month to avert a new supply glut.

Priyanka Chopra shares why she took Nick Jonas' last name
Many celebrities opt out of taking their husbands' last names, but not Priyanka Chopra . It is about all feelings through my career and getting married.

West Indies captain Holder banned from 3rd test vs England
Yet only once in seven home Tests in 2018 season did England reach the benchmark total of 400 and not once in Sri Lanka did they make 350.

Women's brains appear three years younger than men's
As adulthood progresses, people get less of the glucose pumped through the brain, reducing the energy funneled into the process . He said brain metabolism might help researchers understand some of the differences seen between men and women as they age.

India crash to worst ever T20 defeat
Tim Southee , Lockie Ferguson , Mitchell Santener and Ish Sodhi all claimed two wickets apiece. The second T20 in the three-match series is in Auckland on Friday.

John Wall Out 12 Months With Ruptured Left Achilles
Wall has had three knee surgeries with his first dating back to September 2002 when he missed the first 33 games of the season. Washington Wizards guard John Wall looks on from the bench prior to the game against the Indiana Pacers at Capital One Arena.

James passes 32000 career points but suffers worst career loss
As he prepared to take his shot the chants could be heard from the crowd at the Bankers Life Fieldhouse arena. LeBron James climbs to 5th in the all-time scoring list as his Lakers get whipped by the Pacers.

Nantes consider legal action against Cardiff over Sala transfer payment
According to the BBC , Cardiff have withheld the first scheduled payment until they are satisfied with the documentations. The families of Sala, Cardiff City's record signing at £15 million, and Ibbotson have been informed of the discovery.

© 2015 ExpressNewsline. All Rights reserved.