Saudi ‘shock therapy’ sends global crude prices to 5-month highs

US crude oil moving average

US crude oil moving average

Oil prices rose for the fourth day in a row on Wednesday, with Brent nearing a five-month high of $70 a barrel, driven by OPEC-led supply cuts and U.S. sanctions imposed on Iranian and Venezuelan exports.

Oil production from Russian Federation, which has joined OPEC in agreeing to supply cuts to prop up prices, fell to 11.3 million barrels per day (bpd) last month, but missed the country's target under the deal.

Prices have been steadily ticking upwards since oil producing cartel Opec started cutting production in January.

The Wall Street Journal reported the consensus on Brent crude for this year among 12 banks it had polled was US$68 a barrel, which is US$1 higher than their previous consensus during a February poll.

WTI Crude Oil was up 0.65 percent at $61.99 per barrel after rising above $62 for the first time since early November.

OPEC crude production fell for a fourth month in March as Saudi Arabia forged ahead with cutbacks and as power blackouts in Venezuela further squeezed supplies, a Bloomberg survey showed on Monday. The global benchmark crude's premium over WTI for the same month narrowed to US$7.17 a barrel. Crude rose along with equities, which gained as U.S. and Chinese officials prepared to resume negotiations in Washington to resolve differences over trade.

“The production cuts by OPEC+ are providing a nice backdrop here for higher prices and until we see USA production reassert itself, the easier move is higher for oil, ” said Edward Moya, senior market analyst at OANDA.

Suspect Identified In Fatal Nipsey Hussle Shooting
Hussle , whose real name was Ermias Asghedom, was an Eritrean-American father of two who was engaged to actress Lauren London . He then ran down an alley and jumped into the passenger side of a vehicle driven by an unidentified woman , they said .

"Crude imports rose and crude exports fell, which translates into considerably higher net imports".

The EIA also said gasoline inventories had shed 1.8 million barrels in the seven days to March 29, versus a decline of 2.9 million barrels in the prior week.

USA crude oil stockpiles soared unexpectedly last week as imports climbed and production edged higher to a new record, the Energy Information Administration said on Wednesday.

On the supply front, booming American production has steadied, with the USA 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.

Despite Russia curbing its oil production by 225,000 barrels per day (bpd) from its production levels in October, the Caspian region country still missed the target set under the deal reached with OPEC.

-China trade negotiations and positive Chinese and USA factory activity data in recent days has also helped market sentiment by easing fears about weakening global oil demand.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.