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Oil Prices Rise to 4-Month High on OPEC Supply Cuts, Drop in U.S. Output

CommoditiesMar 14, 2019 09:05AM ET
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Investing.com - Oil prices rose to four-month highs on Thursday, pushed up by ongoing supply cuts led by OPEC and as data showed U.S. output slowed last week, boosting optimism that a global surplus is shrinking.

U.S. West Texas Intermediate crude futures for April delivery on the New York Mercantile Exchange gained 30 cents, or around 0.5%, to $58.56 a barrel by 9:05AM ET (13:05 GMT), after going as high as $58.67 earlier, the most since Nov. 13.

Elsewhere, Brent oil for May delivery on the ICE (NYSE:ICE) Futures Exchange in London rose 31 cents, or about 0.45%, to $67.86 a barrel.

In its closely watched monthly oil-market report, the Organization of the Petroleum Exporting Countries (OPEC) said its crude output had fallen by 221,000 barrels per day (bpd) in February from January, to average 30.55 million bpd.

The bulk of OPEC’s cuts in February came from Venezuela, which is facing an economic and political crisis and is currently subject to U.S. oil sanctions.

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

Oil's gains also came as data showed U.S. crude production fell by 100,000 barrels last week, the first decline in three months.

The rally was limited by uncertainty over U.S.-China trade talks and weak data out of China.

Bloomberg reported that a meeting between President Donald Trump and China's Xi Jinping to sign an agreement to end their trade dispute won't occur this month and is more likely to happen in April at the earliest.

Meanwhile, growth in China's industrial output fell to a 17-year low in the first two months of the year, pointing to further weakness in the world's second-biggest economy.

Pressured by weak demand at home and abroad, China's industrial output rose 5.3% in January-February, less than expected and the slowest pace since early 2002.

In other energy trading, gasoline futures climbed 1.3% to $1.880 a gallon, while heating oil added 0.35% to $1.998 a gallon.

Natural gas futures tacked on 0.6% to $2.837 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day amid expectations for a withdrawal of 208 billion cubic feet.

-- Reuters contributed to this report

Oil Prices Rise to 4-Month High on OPEC Supply Cuts, Drop in U.S. Output
 

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