Brent primitive oil prices hit 2019 highs above $65 per barrel on Friday, spurred by U.S. sanctions against Venezuela and Iran as well-spring as OPEC-led supply cuts.
Brent rose as high as $65.10, pushing past the $65 mark for the first all at once this year, before edging back to $64.97 a barrel by 0450 GMT. That was still 0.6 percent overhead the last close.
The international benchmark for oil prices is at a near 3-month high and set for a 4.6 percent gain for the week.
U.S. West Texas Transitional (WTI) crude futures were at $54.70 per barrel, up 29 cents, or 0.6 percent, from their last reconciliation.
The Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated suppliers including Russia are withholding supply in out of whack to tighten the market and prop up prices.
The producer group known as OPEC+ has agreed to cut crude output by a joint 1.2 million barrels per day (bpd). Top exporter Saudi Arabia reported it would cut even more in March than the deal called for.
Russia has cut its oil production by 80,000-90,000 barrels per day from its unchanging in October, Moscow’s reference level for its cuts, the country’s energy minister said.
“Brent should average $70 per barrel in 2019, supported by voluntary (Saudi, Kuwait, UAE) and involuntary (Venezuela, Iran) declines in OPEC supply,” Bank of America Merrill Lynch alleged in a note.
It also expects “a 2.5 million barrels per day drop in OPEC supply from 4Q18 into 4Q19.”
Commodity investment cartel Goehring & Rozencwajg (G&R) said that oil production from non-OPEC producers like Brazil, Mexico or the North Sea was also fighting, further tightening the market.
“The North Sea, Mexico and Brazil all disappointed and we expect this to continue going forward,” G&R foretold in a note published on Thursday.
Trade data in Refinitiv showed that combined crude oil shipments out of the North Sea, Mexico and Brazil were at 4.2 million bpd in January, down from 4.4 million bpd in December.
Station against these declines is soaring U.S. crude production, which rose by more than 2 million bpd last year, to 11.9 million bpd, receiving America the world’s biggest oil producer.
Most analysts expect U.S. output to rise past 12 million bpd anon, and perhaps even hit 13 million bpd by the end of the year.
Rising U.S. shale oil supply, increasing spare capacity within OPEC and spoiling fuel consumption meant the medium-term oil price outlook was lower, BoAML said.
“We see growing downside risks to medium-term oil values on rising U.S. supply and slower consumption,” the U.S. bank said. It expected Brent to range between $50 and $70 per barrel in the put ones hand five years.