Oil hits 2019 highs amid OPEC-led supply cuts, U.S. sanctions on Iran, Venezuela

Oil prices reached their highest so far for 2019 on Thursday as global markets tightened amid supply cuts led by producer club OPEC and U.S. government sanctions against Iran and Venezuela.

International Brent crude oil futures hit a November 2018 high of 68.64 dollars per barrel around at 0453 GMT on Thursday, up 14 cents, or 0.2 per cent from their last close. U.S. West Texas Intermediate (WTI) crude futures also equalled a November 2018 high of 60.27 dollars per barrel on Thursday.

Crude prices have been pushed up by almost a third since the start of 2019 by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), as well as by sanctions enacted against Iran and Venezuela by the United States.

OPEC’s crude oil output has slumped from a mid-2018 peak of 32.8 million barrels per day (bpd) to 30.7 million bpd in February.

The U.S. sanctions are also disrupting supply.

“Venezuelan exports to the U.S. have finally dried up, after the sanctions were placed on them by the U.S. administration earlier this year,” ANZ bank said on Thursday.

Iranian oil exports have also slumped.

The United States aims to cut Iran’s crude exports by about 20 percent to below 1 million bpd from May by requiring importing countries to reduce purchases to avoid U.S. sanctions.

The OPEC cuts and sanctions have also tightened supply within the United States. U.S. crude oil stockpiles last week fell by nearly 10 million barrels, the most since July, boosted by strong export and refining demand, the Energy Information Administration said on Wednesday.

Stockpiles fell 9.6 million barrels, to 439.5 million barrels, their lowest since January.

Credit: Reuters/NAN