TOKYO: Oil prices rose for a fourth day on Wednesday, pushing Brent toward $70 a barrel as support from OPEC-led supply cuts and US sanctions overshadowed a report showing an unexpected rise in US inventories.
Brent futures rose 36 cents, or 0.5 percent, to $69.73 a barrel by 0554 GMT, after earlier reaching $69.87, the highest since Nov. 12, the last time they traded above $70.
US West Texas Intermediate crude rose 26 cents, or 0.4 percent, to $62.84 cents a barrel, earlier rising to $62.90, the highest since Nov. 7.
“The production cuts by OPEC+ are providing a nice backdrop here for higher prices and until we see US production reassert itself, the easier move is higher for oil,” said Edward Moya, senior market analyst at OANDA.
Oil prices have been supported for much of 2019 by efforts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, known as OPEC+, who have pledged to withhold around 1.2 million barrels per day (bpd) of supply this year.
Supply from OPEC countries hit a four-year low in March, a Reuters survey found earlier this week.
Oil production from Russia fell to 11.3 million barrels per day (bpd) last month, but missed the country’s target under the deal.
“We assume that OPEC crude oil production will average 30.1 million bpd in 2019 … down from 31.9 million bpd in 2018,” BNP Paribas said in a note, reducing an earlier forecast for this year by 200,000 bpd.
Three of eight countries granted waivers by Washington to import oil from Iran have cut the imports to zero, a US official said on Tuesday, adding that improved global oil market conditions would help reduce Iranian crude exports further.
Vice President Mike Pence said on Tuesday the United States would continue to pressure Venezuela’s oil industry and those who support it with economic sanctions, citing world oil prices as low enough to allow for the measures.
Venezuela’s state-run energy company, PDVSA, kept oil exports near 1 million barrels per day in March despite US sanctions and power outages that crippled its main export terminal, according to PDVSA documents and Refinitiv Eikon data, Reuters reported later in the day.
US crude stocks rose unexpectedly last week, while gasoline and distillate inventories drew, industry group the American Petroleum Institute said late on Tuesday.
Official numbers from the US Department of Energy (DoE) are due out later on Wednesday.
“As long as we don’t see a major build with the DoE crude oil inventories, we could see a clean move higher,” Moya said.