Brent crude oil prices on Thursday hit their highest so far this year, pushed up by ongoing supply cuts led by OPEC and by US sanctions against Venezuela and Iran.

An oil pumpjack and a tank with the corporate logo of state oil company PDVSA are seen in an oil facility in Lagunillas
An oil pumpjack and a tank with the corporate logo of state oil company PDVSA are seen in an oil facility in Lagunillas (Isaac Urrutia / Reuters)

An unexpected dip in US crude oil inventories and production also lifted prices, traders said.

International Brent crude oil futures marked a 2019-peak of $67.80 per barrel in Asian morning hours. That was also the strongest level since November 2018.

Brent was still at $67.75 per barrel at 0244 GMT, up 20 cents, or 0.3 percent, from its last close.

US West Texas Intermediate (WTI) crude futures were at $58.38 per barrel, up 12 cents, or 0.2 percent, from their last settlement, and also close to November 2018 highs reached the previous day.

“Tighter global inventories from OPEC-led supply cuts and ... US sanctions on Venezuelan petroleum products have cemented support for oil prices,” said Benjamin Lu of Singapore-based brokerage Phillip Futures.

The Organization of the Petroleum Exporting Countries (OPEC) and some non-aligned producers including Russia have been withholding oil supply since the start of the year to tighten global markets and prop up crude prices.

In Venezuela, oil production and exports have been disrupted by a political and economic crisis that has caused massive blackouts and supply shortages, while Washington has barred US companies from doing business with the Venezuelan government, including state-owned oil firm PDVSA.

Amid the turmoil, two storage tanks exploded at a heavy-crude upgrading project in eastern Venezuela on Wednesday, according to an oil industry source and a legislator.

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.

S&P, Nasdaq rise on tame inflation data

Meanwhile, a weekly report by the US Energy Information Administration (EIA) said US commercial crude oil inventories fell last week as refineries hiked output.

Crude inventories dropped by 3.9 million barrels in the last week, to 449.07 million barrels, compared with analyst expectations for an increase of 2.7 million barrels.

US crude oil production also dipped, falling by 100,000 barrels per day (bpd) to 12 million bpd.

Source: Reuters