Oil Prices Near 2019 Highs
By Christopher Alessi
--Oil prices ticked up Friday, hovering near year-to-date highs, amid ongoing signs of falling OPEC crude production.
--Brent crude, the global oil benchmark, was trading up 0.4% at $67.52 a barrel on London's Intercontinental Exchange.
--West Texas Intermediate futures, the U.S. oil standard, were up 0.4% at $58.84 a barrel on the New York Mercantile Exchange.
OPEC: The crude market is being supported by continued declines in production--both voluntary and involuntary--from the Organization of the Petroleum Exporting Countries. On Friday, the International Energy Agency said OPEC's crude output had fallen by 240,000 barrels a day last month, to 30.68 million barrels day, its lowest level in four years. The IEA report came a day after OPEC released its own monthly oil-market report showing a similar decline for February.
Both reports showed that last month's output reductions were driven in part by Saudi Arabia continuing to lead the way in cutting its output as part of a coordinated effort by OPEC and its production allies to mop up excess global supply and rebalance the market. But significant declines also came from Venezuela, whose oil industry has been under sanctions by the U.S. since January amid ongoing political and economic upheaval.
OPEC and 10 partner producers outside the cartel, led by Russia, agreed late in 2018 to hold back crude output by a collective 1.2 million barrels a day through the first half of 2019. Venezuela is one of three OPEC members exempt from the group's latest production-cut agreement.
"The OPEC+ production limit continues to be the stabilizing force," in the oil market, said Alfonso Esparza, senior market analyst at OANDA.
U.S. Growth: Relentless U.S. shale oil production continues to keep somewhat of a lid on prices, analysts said. The IEA earlier in the week said U.S. crude production is expected to account for 70% of the total increase in global production capacity over the next five years, while the country is set to become a net exporter of oil by 2021. U.S. crude output is currently hovering around a record 12 million barrels a day. In 2018, the U.S. surpassed Russia and Saudi Arabia to become the world's largest oil producer.
Concerns about slowing global economic growth, with a potential knock-on effect for world oil demand, have also kept a ceiling on prices.
"The market is still torn between economic concerns and high U.S. oil production on one hand and remarkable OPEC+ compliance on the other," said Stephen Brennock, analyst at brokerage PVM Oil Associates Ltd.
--Baker Hughes releases weekly data Friday on the number of rigs drilling for oil in the U.S., a key metric of activity in the sector.
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