Brent and West Texas Intermediate crude oil futures reached four-month highs Thursday, as production cutbacks by Opec+, along with U.S. sanctions on Iran and Venezuela, tightened global supplies.
An unexpected dip in U.S. crude oil inventories and production also supported prices, traders said.
Brent crude oil futures hit a 2019-peak of $68.14 per barrel Thursday, before falling to $67.19/Bbl. U.S. West Texas Intermediate crude futures ended Thursday’s trading session at $58.56/Bbl, up 30 cents, or 0.51%, Kallanish Energy reports.
Most of the Opec cartel, along with a number of non-Opec producer-nations led by Russia and known collectively as Opec+, since Jan. 1, have been working to reduce marketed crude by 1.2 million barrels per day (Mmbpd). The reduction is designed to cut any oil glut and prop up prices.
Crude oil production and exports in Venezuela have been disrupted by a political and economic crisis that has caused massive blackouts and supply shortages. The Trump administration has placed sanctions on the country and the state-owned oil firm PDVSA.
Adding to the problems, two storage tanks exploded at a heavy-crude upgrading project in eastern Venezuela Wednesday, an oil industry source and a legislator told Reuters.
In the Middle East, the U.S. looks to reduce Iran’s crude exports by roughly 20% to below 1 Mmbpd beginning in May by requiring importing countries to reduce purchases to avoid U.S. sanctions, two sources familiar with the matter told Reuters.
The U.S. Energy Information Administration reported U.S. crude oil inventories fell last week as refineries hiked output.
U.S. crude oil production also dropped, falling by 100,000 barrels per day, to 12 Mmbpd.
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