Oil nears $70, hovers near five-month highs on cuts and sanctions

Oil nears $70, hovers near five-month highs on cuts and sanctions

Among exempt producers, Venezuelan supply fell by 150,000 bpd as power cuts hit exports, adding to the impact of U.S. sanctions on state oil company PDVSA and a long-term decline in production.

It fell upon Bijan Zanganeh, energy minister for Iran, to remind colleagues that fundamentals should not be overlooked: he told Russian media that the "Oil market is in a fragile situation considering the supply and demand balance, so the oil producers should be wary of any trouble in the oil market, especially due to us measures against big oil producers".

Crude oil is trading above $68 a barrel, close to a 2019 high, boosted by the Saudi move and involuntary supply curbs in Venezuela and Iran, which are both under U.S. sanctions that limit their exports.

"The psychologically important $70 a barrel threshold has proved a tough nut to crack for the Brent benchmark over the past few weeks", PVM oil broker Stephen Brennock said.

For the 24 hours to 23:00 GMT, Crude Oil rose 1.28% against the United States dollars and closed at USD62.48 per barrel, amid signs of tightening crude oil supplies and easing concerns over global economic growth.

During the previous week, the API announced a surprise build in crude oil of 1.93 million barrels.

OPEC crude production fell for a fourth month in March as Saudi Arabia forged ahead with cutbacks and as power blackouts in Venezuela further squeezed supplies, a Bloomberg survey showed on Monday.

West Texas Intermediate Crude futures for May ended down $0.12, or 0.2%, at $62.46 a barrel, after rising to a fresh five-month high of $62.98 a barrel.

Other oil-market news Saudi Aramco's bond prospectus revealed its giant Ghawar oil field can pump 3.8 million barrels a day, well below the more than 5 million that had become conventional wisdom in the market.

On the supply side, Russian output has dropped to 190 000 barrels a day below October levels, the country's energy minister said in a statement, falling short of the 228 000-barrel-a-day cut pledged under the Opec+ deal.

Distillate fuel product supplied averaged 4.3 million barrels per day over the past four weeks, up by 6.4 percent from the same period a year ago.

The deal between OPEC and non-OPEC oil producing countries, first signed in 2017, is supposed to prevent a crisis due to sliding oil prices, which have continued and picked up pace late a year ago. Early Wednesday, reports are circulating that the USA and China may be close to a trade deal.

The latest EIA data showed that average daily crude oil production in the U.S. US refineries operated at 86.4 percent of their operable capacity.

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