SINGAPORE (Reuters) – Oil prices dropped from 2019 highs on Wednesday, with increasing US supply and slowing economic growth claiming upward pressure from supply disruptions led by OPEC producer club and Washington's sanctions against Iran and Venezuela.
FILE PHOTO: A pumpkin jacket is seen at sunrise near Bakersfield, California October 14, 2014. REUTERS / Lucy Nicholson / Filfoto
U.S. West Texas crude futures beat 2019 highs of $ 56.39 a barrel on Wednesday, but had fallen to $ 56.15 a barrel by 0523 GMT, slightly above their final settlement.
International Brent Raw Futures was $ 66.33 per barrel, down 12 cents, or 0.2 percent, from their last close, but still not far off their 2019 high of $ 66.83 a barrel from Monday.
Oil prices have been supported by supply savings led by the Organization for Petroleum Exporting Countries (OPEC).
OPEC member and top raw exporter Saudi Arabia are expected to reduce light oil transfers to Asia in March as part of the tightening of markets.
OPEC and some non-affiliated producers such as Russia agreed at the end of last year to cut production by 1.2 million barrels per day (bpd) to prevent a major swelling supply overhang.
"We have lowered Saudi crude oil production in line with announcements … (and) now assume that Saudi Arabia will produce in the first three quarters of 2019 less than the 10.31 million BPD target agreed in December. 7 OPEC, non-OPEC meeting, said French bank BNP Paribas in a note.
Due to the downturns, GDP said that oil prices would "rally through Q3 2019", with Brent on average $ 73 per barrel and WTI on average $ 66.
Another important oil price driver has been US sanctions against Iran and Venezuela oil exporters.
Despite sanctions, Iran's commodity exports were higher than expected in January, averaging around 1.25 bpd, according to Refinitive Ship Tracking Data Many analysts had expected Iran's oil exports to fall below $ 1 million after the imposition of US sanctions in November last year.
SHALE BOOM, WEAKER ECONOMY
The standard of supply and sanctions is US r production, which increased by more than 2 million bpd in 2018 to a record 11.9 million bpd, thanks to the booming oil production expected by the Energy Information Administration on Tuesday.
BNP Paribas said British US production would lead to lower oil prices towards the end of the year, with Brent dipping to an average of $ 67 per barrel in the fourth quarter and WTI at an average of $ 61.
"US oil production Growth, driven by slate, will be more widely exported in larger volumes to international markets, while the global economy is expected to experience a synchronized decline in growth, "said the bank.
Reporting by Henning Gloystein; Editing Joseph Radford and Richard Pullin