Oil pushed up by deepening OPEC supply cuts, sanctions on Venezuela

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This is while compliance by non-OPEC participants was only 25 percent, says IEA. The United Arab Emirates and Kuwait were next according to the report.

Asia's oil refiners are increasingly finding themselves trapped between the rock of OPEC's production cuts and the hard place of U.S. President Donald Trump's sanctions against Iran and Venezuela. "Expectations of lower American crude stockpiles added to the optimism". Most of that reduction has been thanks to Saudi Arabia.

The recent developments in the crude oil market have all but eliminated the discount enjoyed by heavy crudes, and in some cases, physical cargoes of some heavy grades have traded at premiums to light crudes.

Further, the Energy Information Administration (EIA) said that Venezuelan output slipped to 1.22 million barrels per day.

Oil has advanced around 18% this year as the OPEC+ coalition cuts production, although the rally has sputtered this month amid record American shale output and rising angst over the trade war.

Production has been hampered by corruption, political interference and lack of foreign investment and technology to maintain existing fields and develop new ones.

Iran's January oil production is the lowest level since October 2014, during the tightest period of previous round of global sanctions (2012-2016), imposed on Iran's oil exports.

Output has gone into free fall as the country's isolation has increased, shrinking from 2.4 million bpd in 2016 to 2.0 million bpd in 2017 and 1.5 million bpd in 2018, according to the Joint Organisations Data Initiative.

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Brent oil jumped to an 8-day high of $63.32 per barrel yesterday after the Organization of the Petroleum Exporting Countries (OPEC) said that it had cut its output by nearly 800,000 barrels per day in January to 30.81 million barrels per day.

Oil prices have remained steady near $60 a barrel in London even as turmoil builds in Venezuela, as markets work through plentiful supplies accumulated previous year, the IEA said. The price has largely plateaued since then, in spite of the subsequent imposition of US sanctions.

Venezuela has tried to find alternative customers, especially in Asia, but under US pressure many buyers there are also shying away from dealing with PDVSA.

U.S. West Texas Intermediate (WTI) crude oil futures were at $53.60 per barrel at 0219 GMT, up 50 cents, or 0.9 percent, from their last close. Venezuela announced that it would sell more oil to India.

Total global oil demand is now estimated to average 98.76 mb/d in 2018.

Numerous region's refineries are new and are optimized to process heavy and sour crudes.

Mid-distillates are especially prized at the moment with the forthcoming introduction of new bunker fuel regulations by the International Maritime Organization from the start of 2020.

"Over the past two years, global oil demand has turned out to be higher than expected, supported by healthy economic activities, particularly in the OECD", said the report.