Crude Up 4.1 Percent as Goldman Insists Oil Market is Robust

Venezuela's oil output has always been on a downward spiral thanks to years of underinvestment and mismanagement, with stepped-up United States sanctions further trimming exports.

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

US energy firms this week reduced the number of oil rigs operating for a fourth week in a row, with drilling slowing to its lowest in almost a year, prompting the government to cut crude output growth forecasts.

With OPEC voluntarily withholding supply and USA sanctions preventing Iranian and Venezuelan oil from entering markets, global crude flow data in Refinitiv showed a slight supply deficit likely appeared in the first quarter.

"My expectation for OPEC this year is that they will continue with the production cut that they announced in December".

The Organisation of Petroleum Exporting Countries reduced production by 221,000 bpd in February, a more modest reduction than in prior months.

Venezuela's worsening crisis, including nationwide power outages, could present a "challenge" to the oil market, the International Energy Agency said Friday.

Venezuela produces about 1.2 million barrels of oil a day when operating normally, said the IEA.

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

The IEA, which coordinates the energy policies of industrialized nations, kept its forecast of growth in global oil demand this year unchanged at 1.4 percent, or 1.4 million barrels per day (bpd).

"Geopolitics has added another complication to the global oil market", said the IEA. In the week ending March 8 to 449 million barrels, raw stocks fell by 2.6 million barrels, compared to analysts' forecasts for an increase of 2.7 million barrels.

In China, official statistics showed refinery crude oil use hit a record.

Saudi Energy Minister Khalid Al-Falih suggested last month that he favored maintaining output curbs when asked to comment on U.S. President Donald Trump's tweet on February 25 demanding OPEC to "relax" its stance on tightening supplies.

  • Anthony Vega