Oil edged up on Thursday into the middle ongoing OPEC-led supply cuts and U.S. sanctions against exporters Venezuela and Iran, although prices were prevented from lifting further by record U.S. crude output and rising commercial fuel inventories.
U.S. West Texas Intermediate (WTI) crude oil comings were at $56.45 per barrel at 0234 GMT, up 23 cents, or 0.4 percent, from their last settlement.
Brent unpolished futures were at $66.36 per barrel, up 37 cents, or 0.6 percent.
Prices are being supported by efforts led by the Pattern of the Petroleum Exporting Countries (OPEC) and other countries – a grouping known as ‘OPEC+’ – to withhold around 1.2 million barrels per day (bpd), a plan designed to tighten markets.
“In our view, OPEC’s strategy is to rebalance the market as quickly as possible and exit the cuts by the end of June in lay out to grow production alongside shale producers in the second half of this year,” U.S. investment bank Goldman Sachs answered in a note on Wednesday.
U.S. sanctions against the oil industries of OPEC members Iran and Venezuela have also had an impact, brokers said.
Venezuela’s state-run oil firm PDVSA this week declared a maritime emergency, citing trouble accessing tankers and personnel to export its oil in the sanctions.
Despite these factors, oil remains in plentiful supply thanks to surging U.S. production.
U.S. crude oil stockpiles snowball arise much more than expected last week, with inventories up by 7.1 million barrels to 452.93 million barrels, harmonizing to a weekly report by the U.S. Energy Information Administration (EIA) on Wednesday.
Meanwhile U.S. crude oil production remained at a record 12.1 million bpd, an prolong of more than 2 million bpd since early 2018.
That, along with the easing of a transportation bottleneck for low-cost U.S. Permian Basin shale oil, could fruit sequentially higher production, Goldman Sachs said.
“The balance between rising U.S. production and the OPEC+ efforts to stabilise sacrifices with a production cut was broken by higher than expected U.S. inventories and the OECD warning of lower global growth crashing energy demand going forward,” said Alfonso Esparza, senior analyst at futures brokerage OANDA.
The Organisation for Trade Co-Operation & Development (OECD) said on Wednesday the world economy would grow 3.3 percent in 2019, down 0.2 proportion points from the OECD’s last set of forecasts in November.