Oil Rises Strongly Supported by Cuts, Sanctions

Oil Rises Strongly Supported by Cuts, Sanctions

In the Middle East, the United States aims to cut Iran's crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid US sanctions, two sources familiar with the matter told Reuters.

US crude stocks fell last week as refineries hiked output, the Energy Information Administration (EIA) said.

The National Bank of Australia said the outlook for the oil market was mixed because there were downside risks to prices due to concerns about economic growth and strong growth in USA supply, while the cutbacks in OPEC declined and the U.S. imposed sanctions on Iran and Venezuela.

Production is expected to increase 1.35 million bpd compared to the previous year, but will grow more slowly than the previous forecast of 1.45 million bpd.

Crude oil imports have decreased in recent years as United States crude oil production has increased.

USA crude oil exports have set annual record highs in each year since 2014, most recently averaging 2.0 million bpd in 2018.

Both benchmarks settled at their highest levels since mid-November. Crude oil imports to the USA fell last week by 523,000 bpd to 6.4 million bpd.

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Saudi Energy Minister Khalid al-Falih said on Sunday that the production-curbing agreement would likely last until at least June.

Total US petroleum product exports averaged a record 5.6 million bpd in 2018. "We do not want severe volatility in prices because this affects producers and consumers", he added.

Continued supply reductions would further support oil prices, which are up about 25 per cent this year, and incur the wrath of U.S. President Donald Trump, who has demanded OPEC ease its efforts to bolster the market.

International Brent crude oil futures marked a 2019-peak of $67.80 per barrel in Asian morning hours. Brent touched $67.39 a barrel on Monday, its highest since February 25.

As of 1555 GMT, front monh West Texas Intermediate crude oil futures for prompt month delivery were climbing by 1.73% to $57.87 a barrel on the ICE.

"With the refiners starting to slowly come out of maintenance, OPEC cuts starting to kick in, and Venezuelan supplies, you're probably now looking at a future with more draws in the coming weeks", said Phil Flynn, analyst at Price Futures Group in Chicago.

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