Oil prices rose yesterday back towards five-month highs hit the previous day, as OPEC production cuts and US sanctions on Iran and Venezuela continued to tighten supply, though economic worries increased.
International benchmark Brent futures were up 18 cents, or 0,25 percent, at $70,79 a barrel by 1220 GMT. US West Texas Intermediate (WTI) crude oil futures were up 32 cents, or 0,5 percent, at $64,30.
Oil markets have tightened this year because of US sanctions on oil exporters Iran and Venezuela, as well as supply cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+.
Brent and WTI crude oil futures have risen by about 30 percent and 40 percent respectively since the start of the year.
“With geopolitical risks continuing to impact production from Venezuela and Iran and now also potentially Libya and even Algeria, the crude oil market is likely to remain supported until the price reaches a level that is satisfactory for OPEC and Russia,” said Ole Hansen, commodity strategist at Saxo Bank. Protests led to the resignation of Algeria’s veteran president this month and armed clashes have erupted near the Libyan capital Tripoli, but political upheaval has yet to impact output in major North African producers.
An OPEC monthly report released on Wednesday showed that Venezuela’s oil output sank last month to a long-term low below 1 million barrels per day (bpd), due to US sanctions and blackouts.