LONDON, Apr 02 (Reuters): Oil hit a 2019 high above $69 a barrel on Tuesday on the prospect that more sanctions against Iran and further Venezuelan disruptions could deepen an OPEC-led supply cut, and as the market became less worried that demand may slow.
The United States is considering more sanctions against Iran, whose oil exports have been halved by existing measures, an official said. A key crude terminal in Venezuela, also under US sanctions, has halted operations again.
Brent crude rose 10 cents to $69.11 a barrel by 0826 GMT, having touched $69.50, the highest since mid-November. US crude was up 11 cents at $61.70 after rising above $62 for the first time since early November.
"The supply cuts have been there for a while but Venezuela is not improving," said Olivier Jakob, analyst at Petromatrix. "That is taking a lot of oil away from the market."
Further supply losses from Iran and Venezuela could widen an OPEC-led production cut that took effect in January, designed to prevent a price-sapping rise in inventories.
Supply from the Organisation of the Petroleum Exporting Countries hit a four-year low in March, a Reuters survey found, because top exporter Saudi Arabia cut more than it had agreed to and due to the involuntary declines.
This week's reports on US supplies are expected to show crude inventories fell, a sign that the OPEC curbs are having the impact producers intended.
Six analysts polled by Reuters estimated, on average, that crude stocks fell by 1.2 million barrels in the week to March 29. The first of this week's supply reports, from the American Petroleum Institute, is due at 2030 GMT.
Oil's pattern on the price charts could lead to further gains. Brent is trading just below the 200-day moving average and a move above this mark would provide additional technical support, Jakob said.
Another report from Moscow adds: Russian oil output declined to 11.298 million barrels per day (bpd) last month, energy ministry data showed on Tuesday, missing the target set under a global deal to cut oil production.
The March output was down by around 112,000 bpd from the October 2018 level, the baseline of the global deal. Under the agreement, Russia has pledged to cut its oil output by 228,000 bpd from that level.
In tonnes, Russian oil production reached 47.78 million tonnes. Reuters uses the 7.33 barrels/tonnes ratio.
Russian Energy Minister Alexander Novak said on Tuesday that the country's oil production in April would be in line with the global deal between OPEC and non-OPEC countries.
The ministry said separately that by the end of March Russia cut production by 225,000 bpd from the average October 2018 level.
The data showed that Russia's largest oil producer, Rosneft, cut its output by around 0.45 per cent in March from February.
Producers, listed as "other" than majors, reduced their production in March by 0.63 per cent in March, month-on-month.
The Organisation of the Petroleum Exporting Countries and other large global oil producers led by Russia agreed to cut their combined oil production by 1.2 million bpd starting from Jan. 1 for the next six months.
OPEC oil supply sank to a four-year low in March, a Reuters survey found, as top exporter Saudi Arabia over-delivered on the group's supply-cutting pact, while Venezuelan output fell further due to sanctions and power outages.
The biggest drop in supply came from Saudi Arabia, OPEC's biggest producer, which pumped 220,000 bpd less than in February, the survey showed.
Sources told Reuters that Saudi Arabia is having a hard time convincing Russia to stay much longer in the OPEC-led pact, and Moscow may only agree to a three-month extension.
© 2025 - All Rights with The Financial Express
