Oil rose to around $68 a barrel yesterday as OPEC supply cuts and expectations of lower US inventories outweighed concern about weaker demand due to an economic slowdown.
The price of global benchmark Brent crude has risen by more than 25 percent in 2019, supported by supply curbs by the Organisation of the Petroleum Exporting Countries plus allies, and losses due to US sanctions on Iran and Venezuela.
Brent was up 92 cents at $68,13 a barrel at 1334 GMT, not far from its 2019 high of $68,69 reached on March 21. US crude added $1,28 to $60,10.
“It appears that concerns about demand have taken something of a back seat,” Commerzbank analyst Carsten Fritsch said.
Expectations of a further drop in US inventories also supported prices, suggesting the OPEC-led curbs were helping to avert a build-up of excess supplies.
The first of this week’s supply reports, from the American Petroleum Institute, is due at 2030 GMT. US crude inventories are forecast to have fallen by 2,4 million barrels in what would be a third straight weekly decline.
Further price support came from another power cut in Venezuela, the second to hit the OPEC nation this month, raising concern about the country’s oil exports. Worries about demand have limited oil’s rally as manufacturing data from Asia, Europe and the United States pointed to an economic slowdown, although bullish bets by some investors are rising. — Reuters.