Oil dips as surging supply counters cuts
SINGAPORE: Oil prices slipped away from 2019 highs on Wednesday, with surging US supply and slowing economic growth tempering upward pressure from supply cuts led by producer club Opec and from Washington’s sanctions on Iran and Venezuela.
US West Texas Intermediate crude oil futures hit 2019 highs of $56.39 per barrel on Wednesday but had slipped back to $56.16 per barrel by 0746 GMT, which was slightly above their last settlement.
International Brent crude futures were at $66.41 per barrel, down 4 cents from their last close, though still not far off their 2019 high of $66.83 per barrel, hit on Monday. Oil prices have been supported
supply cuts led by the by Organization of the Petroleum Exporting Countries (Opec).
Opec-member and top crude exporter Saudi Arabia is expected to reduce shipments of light crude oil to Asia in March as part of the effort to tighten markets.
Opec as well as some nonaffiliated producers such as Russia agreed late last year to cut output by 1.2 million barrels per day (bpd) to prevent a large supply overhang from swelling.
“We have lowered Saudi crude oil output in line with announcements... (and) are now assuming that Saudi Arabia will produce in the first three quarters of 2019 less than the 10.31 million bpd target it agreed to at the December 7 Opec, nonopec meeting,” French bank BNP Paribas said in a note.