Reuters: Oil prices rise on OPEC output cuts, as U.S. sanctions bite

09:00, 12 February 2019
Economy
242 0
REUTERS

U.S. West Texas Intermediate (WTI) crude oil futures were at $52.78 per barrel at 0329 GMT, up 37 cents, or 0.7 percent, from their last close, Reuters said.

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 50 cents, or 0.8 percent, at $62.01 per barrel.

Analysts said markets are tightening amid voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and because of U.S. sanctions on Venezuela and Iran.

But some said supply-side risks were not receiving enough focus.

Read alsoUkraine's Central Bank explains stronger hryvnia in winter

"We believe that oil is not pricing in supply-side risks lately as markets are currently focused on U.S.-China trade talks, ignoring the risks currently in place from the loss of Venezuelan barrels," U.S. bank J.P. Morgan said in a weekly note.

Should U.S.-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."

With OPEC engaged in supply management and the Middle East entangled in political conflicts while production outside the group surges, Bank of America Merrill Lynch said OPEC's global market share would fall as its outright output drops to 29 million barrels per day (bpd) in 2024 from 31.9 million bpd in 2018.

Growing U.S. supply and a potential economic slowdown this year could cap oil markets.

If you see a spelling error on our site, select it and press Ctrl+Enter