Oil nears $67 on Saudi's export cuts

Gladys Abbott
March 15, 2019

Oil prices rose on Wednesday, pushed up by ongoing supply cuts from producer cartel OPEC and US sanctions against Iran and Venezuela.

The IEA's forecast came just a few weeks after the USA exported a record 3.6 million barrels of crude oil on a daily basis, with the country being also a major exporter of petroleum products including refined fuels.

Brent was at $67.14 a barrel at 1320 GMT, up 47 cents or 0.7 percent.

"The decrease in net crude oil imports (December, 2018) was driven primarily by lower imports from Saudi Arabia (down 160,000 bpd month-on-month) and higher exports to Asian countries such as South Korea (up 200,000 bpd month-on-month), China (up 90,000 bpd month-on-month) and India (80,000 bpd month-on-month)", Barclays bank said.

While the OPEC-led production cuts continue to do their job by trimming the excess global supply and stabilizing prices, the markets are getting an extra boost from the news of the worst blackout on record in Venezuela.

The resolution was to be subject to a review to either extend the cut by June, or discontinue after the monitoring team has reviewed the impact.

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A host of involuntary supply curbs in OPEC members, caused by unrest in Libya and USA sanctions on Iran and Venezuela, have also boosted prices. Further trend depends upon the violation of a sideways channel which is support oil around $55 along with resistance around $58.

The was one of the major talking points in a meeting between Petroleum Minister Dharmendra Pradhan and his Saudi counterpart and the chairman of Saudi Aramco, Khalid A Al-Falih, in New Delhi on Saturday.

"We will see what happens by April".

US crude stocks fell last week as refineries hiked output, the Energy Information Administration (EIA) said.

The United States surprised the market in November past year by allowing eight countries to keep importing Iranian oil - in part causing Brent crude futures, the worldwide benchmark, to fall to near $50 a barrel in late December after surpassing $86 a barrel in October.

The slowdown in drilling points to more timid output growth going forward, but because the overall drilling level remains relatively high despite the recent decline, many analysts still expect USA crude output to rise above 13 million bpd soon.

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