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Reuters: Oil is the highest since November 2018, due to the reduction of OPEC, US sanctions – news economy



Brent and WTI have reached the highest level since November at $ 70.76 and $ 63.48 a barrel, early on Monday.

Reuters

Reuters

Brent futures' international reference price was $ 70.65 per barrel at 0441 GMT on Monday, up 31 cents, or 0.4 percent compared to its latest closing, Reuters said.

Middle East West Texas (WTI) oil rose by 31 cents or 0.5 percent to $ 63.39 per barrel.

Brent and WTI have reached the highest level since November at $ 70.76 and $ 63.48 a barrel, early on Monday.

"Brent prices have risen by more than 30 percent over the previous year, as OPEC + has continued to reduce its supply for four consecutive months, and optimism due to US-China trade negotiations helped boost demand for demand," states American bank JPMorgan.

Read alsoReuters: Oil has been the strongest in the last ten years due to the decline in OPEC, sanctions

In order to support the prices, the Organization of Oil Exporting Countries (OPEC) and unrelated allies like Russia, known as OPEC +, have pledged to maintain about 1.2 million barrels a day (bpd) supply this year.

Energy consulting firm FGE said these cuts meant "surplus stock surpluses," adding that the "market was ready for $ 75 a barrel or more" for Brent.

Powerful employment data in the US on Friday also helped boost Asian markets on Monday.

"Oil bulls are burning with strong employment data in the US," said Sukrit Vijayakar, director of energy consulting firm Trifecta.

"Libyan military action, which could undermine supply from the OPEC member state, was also aiding the prices," he said.

Oil has further increased due to US sanctions against Iran and Venezuela.

"Sanctions can reduce the 500,000 bpd of Venezuelan exports, add that to reducing the renunciation of Iran, and prices may increase considerably," FGE said.

Despite the multitude of price drivers, there are still some factors that could reduce oil later this year.

Russia is hesitating as a shareholder in an agreement with OPEC to suspend production and may increase production if the agreement does not extend before July 1, Alexander Novak said on Friday.

Russian oil production reached last year's national record of 11.16 million barrels a day.

In the United States at the end of March, oil production reached a global record of 12.2 million barrels per day.

Oil exports to the United States also grew, reaching for the first time 3 million bpd earlier this year.

"With new gas pipelines (from July) we can see an increase of 500,000 to 600,000 bpd in US exports," FGE said.

There is still concern over the health of the global economy, especially if China and the United States are failing to resolve their trade disputes soon.

"Global demand has weakened, and existing customs duties on Chinese commodities in the US provide additional resistance," Moody's rating agency said on Monday, although he added that Chinese incentive measures are likely to support growth in 2019.


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