Published: Sun, April 07, 2019
Markets | By Otis Pena

Brent nears $70 on global supply

Brent nears $70 on global supply

Crude oil futures were supported by ongoing efforts by the Organization of the Petroleum Exporting Countries and allies such as Russian Federation, a group known as OPEC+, to reduce oil output by about 1.2 million bpd this year.

Oil prices climbed more than 1 percent on Friday as strong US employment data tempered fears that global crude demand might weaken, and on expectations that an escalating conflict in Libya could tighten oil supplies.

Brent futures were unchanged at $69.37 a barrel by 11:00 a.m. EST (1500 GMT).

Brent futures touched $70.03/Bbl, the highest level since November 12, when it last traded above $70/Bbl.

Meanwhile, the West Texas Intermediate (WTI) crude futures ended lower by 0.03 percent to Dollars 62.08 per barrel, while Brent crude, the global benchmark, fell 0.30 percent to USD 69.19 per barrel.

Brent has gained almost 30 percent this year, while WTI has risen almost 40 percent.

US West Texas Intermediate (WTI) crude was down 1 cent at $62.09. Prices have been underpinned by tightening global supplies and signs of demand picking up.

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According to Michael McCarthy, chief market strategist at CMC Markets in Sydney: "There is a clear bias to the upside with the supply restrictions". -China trade relations limited oil price gains.

The Caixin/Markit services purchasing managers' index rose to 54.4, the highest since January 2018 and up from February's 51.1, a fourth-month low, a private business survey of China's service sector showed on Wednesday.

U.S. President Donald Trump on Thursday said the two sides were "very close to making a deal", but the United States remains hesitant to lift its tariffs on $250 billion worth of goods.

Crude oil is also supported by an agreement between OPEC and allies such as Russian Federation, a group known as OPEC+, to reduce oil output by about 1.2 million bpd this year. In a signal that supply may tighten more, a U.S. official said on Tuesday that three of eight countries granted waivers by Washington to import oil from Iran had cut such purchases to zero, adding that improved oil market conditions would help reduce Iranian crude exports further.

The refinery maintenance season is drawing to a close, which should boost demand for crude, said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.

US crude oil stockpiles soared unexpectedly last week as imports climbed and production edged higher to a new record, the Energy Information Administration said on Wednesday. Analysts had forecast a decrease.

Crude is also supported by an agreement to cut production by 1.2 million barrels per day (Mmbpd) by the producer-countries that comprise Opec+.

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