Business

OPEC cuts oil production in February despite pressure from Trump

Share
OPEC cuts oil production in February despite pressure from Trump

Another influence for traders was US sanctions against oil exports from Iran and Venezuela said to be contributing to the tightening: Barclays noted that "Failures in [Venezuela's] electrical system".

In the Middle East, the United States aims to cut Iran's crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid US sanctions, two sources familiar with the matter told Reuters.

Oil rallied on Wednesday on US government data showing a surprise fall in crude inventory and a lower-than-expected estimate of USA crude production growth.

Crude oil is navigating levels last seen in mid-November 2018 further north of the $58.00 mark per barrel, always bolstered by a softer buck and a generalized better tone in the risk-associated complex.

Production is expected to increase 1.35 million bpd compared to the previous year, but will grow more slowly than the previous forecast of 1.45 million bpd.

The US Petroleum Institute said Tuesday that crude oil stocks in the United States unexpectedly fell last week, while gasoline stocks fell and distillate stocks increased.

In the report, OPEC said its oil output fell by 221,000 bpd month-on-month to 30.55 million bpd in February.

Thamer Ghadhban told reporters that an Opec meeting in Vienna in April would assess member states› compliance with agreed production cuts and whether to extend the curbs until the end of the year.

Iraq is committed to the deal and working to stabilise markets, and is producing slightly more than 4.5 million bpd, below its full capacity of almost 5 million, Ghadhban said.

A widespread power outage in Venezuela that has stalled crude exports from the OPEC-member nation, which has already seen reduced shipments from US sanctions, helped to tighten the market.

International Brent crude oil futures were at $66.93 a barrel at 0039 GMT, up 26 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate crude futures edged up 29 cents to $58.55.

"With the refiners starting to slowly come out of maintenance, OPEC cuts starting to kick in, and Venezuelan supplies, you're probably now looking at a future with more draws in the coming weeks", said Phil Flynn, analyst at Price Futures Group in Chicago.

Share