OPEC cuts & U.S. sanctions against Iran and Venezuela boosting global crude prices

Andrew Cummings
February 14, 2019

The agency also lowered its forecast for demand for OPEC crude, production of which the group has pledged to cut by 800,000 bpd this year as part of an agreement with Russian Federation and other non-OPEC producers such as Oman and Kazakhstan.

Oil prices rose on Wednesday as producer club Organisation of the Petroleum Exporting Countries (OPEC) said it had cut supply deeply in January and as United States sanctions hit Venezuela's oil exports. "Should oil demand growth come in line with our expectations, the greater supply losses leave risk that.spot prices rally even faster and higher than we forecast".

TransCanada is beginning fix and restoration work on the Keystone crude oil pipeline following an oil spill, a spokesman said Wednesday.

OPEC production fell to a four-year low in January as the cartel applied a new pact to boost global oil prices, the International Energy Agency said Wednesday, but Russian Federation and other ex-Soviet states failed to cut back output as much as promised.


OPEC cut output by nearly 800,000 bpd in January to 30.81m bpd.

Oil descended into a bear market in November, a swift drop from four-year highs seen in October, as traders grew anxious over strengthening U.S. production and an outlook for softer global fuel demand.

"In quantity terms, in 2019, the US alone will grow its crude oil production by more than Venezuela's current output".

Courvalin said the main OPEC oil producers are making deeper-than-expected production cuts.


The barrel of West Texas Intermediate is up for the second session in a row today on the back of firm optimism over a potential agreement in the US-China trade talks, all despite latest news seems to leave the final decision to a Trump-Xi meeting.

"This is because, in terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations", the group added.

The IEA further added that traders shouldn't expect US sanctions against Venezuela to fuel a rally in oil prices.

In the US, oil inventories climbed 3.63 million barrels, while supplies of gasoline, heating oil and other fuels added about 3 million barrels more, according to weekly data from the Energy Information Administration.


The IEA said it expected global oil demand this year to grow by 1.4 million bpd, while non-OPEC supply will grow by 1.8 million bpd. Analysts polled by Reuters forecast an increase of 2.7 million barrels.

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