Brent oil moves above US$70 on OPEC cuts and US sanctions

Brent crude futures rose 3 US cents above the previous session’s close to reach US$70.14 per barrel at around 10.30am Singapore time on Tuesday.

Brent crude oil Source: Bloomberg

Brent crude oil prices rose above US$70 per barrel on Tuesday, supported by supply cuts from the Organization of the Petroleum Exporting Countries (OPEC) and United States (US) sanctions on Iran and Venezuela.

Brent crude futures rose 3 US cents above the previous session’s close to reach US$70.14 per barrel at around 10.30am Singapore time on Tuesday.

US West Texas Intermediate (WTI) were at US$59.21 per barrel, 1% or 58 US cents higher than the previous close on Friday. On Monday, most US markets were closed due to a Federal Holiday.

OPEC supply cuts, US sanctions on Iran

The OPEC supply cuts has been propping up prices since the start of this year, with oil prices rallying around 40% year-to-date.

This month, Saudi energy minister Khalid al-Falih said that OPEC and its supporting countries have reached an agreement to reduce oil supplies at a slow pace, to provide stability in the oil market.

Oil inventories in developed countries rose by 3.3 million barrels month-on-month in March and 22.8 million above their five-year average, OPEC data showed.

On June 25 and 26, OPEC and its allies including Russia are scheduled to meet to discuss the forward plans of their oil output policy.

Washington on Friday said it would deploy more troops to the Middle East, further raising tensions in the regions. Even so, the impact on the tensions between US and Iran may be limited to the oil market, suggests experts.

The US has also imposed sanctions on Venezuela’s oil exports, as it attempts to topple the government ruled by president Nicolas Maduro.

Amid the US sanctions and OPEC cuts, the oil prices are still capped by global growth concerns and the US-China trade tensions, which are expected to curb fuel consumption.


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