The Hindu Business Line

Oil inches to $70, near 5-month highs on cuts and sanctions

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Oil prices steadied on Wednesday after Brent pushed towards a nearly five-month high of $70 a barrel on OPECled supply cuts and US sanctions, with gains capped by a surprise increase in American inventorie­s.

Brent futures had moved up 24 cents, or 0.35 per cent, to $69.61 by 1220 GMT. They earlier reached $69.96 - the highest since November 12, when they last traded above $70.

US West Texas Intermedia­te crude rose a cent to $62.59, having briefly hit $62.99, the highest since November 7.

“The psychologi­cally important $70 a barrel threshold has proved a tough nut to crack for the Brent benchmark over the past few weeks,” PVM oil broker Stephen Brennock said.

“Underpinni­ng this latest bout of upward pricing pressures is the positive afterglow from surveys pointing to another sizeable fall last month in OPEC output. Reduced supplies from the producer group will go a long way to cementing the tighter fundamenta­l backdrop.”

Oil prices have been supported for much of 2019 by efforts by the Organizati­on of the Petroleum Exporting Countries and allies such as Russia, 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 this week.

Oil production from Russia fell to 11.3 million bpd last month, but missed the country’s target under the supply deal.

Official numbers from the US government's Energy Informatio­n Administra­tion (EIA) are due later on Wednesday.

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