Oil up on OPEC output cuts as sanctions against Venezuela, Iran bite

Author: Agencies

Oil prices rose on Tuesday amid OPEC-led supply cuts and US sanctions against Iran and Venezuela, although analysts expect surging US output and concerns over economic growth to keep markets in check. US West Texas Intermediate (WTI) crude oil futures were at $52.69 per barrel at 0751 GMT, up 28 cents, or 0.5 percent, from their last close. The ongoing closure of parts of the Keystone pipeline that brings Canadian oil into the United States also helped prop up WTI, traders said. International Brent crude futures were up 38 cents, or 0.6 percent, at $61.89 per barrel. Analysts said markets are tightening amid voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and because of US sanctions on Venezuela and Iran. But some said supply-side risks were not receiving enough focus. “We believe that oil is not pricing in supply-side risks lately as markets are currently focused on US-China trade talks, ignoring the risks currently in place from the loss of Venezuelan barrels,” US bank J.P. Morgan said in a weekly note. Should US-China talks to end trade disputes between the two nations have a positive outcome, the bank said oil markets would “switch attention from macro concerns impacting future demand growth to physical tightness and geopolitical risks impacting immediate supply”.

Published in Daily Times, February 13th 2019.

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