Brent crude oil prices rose on Thursday to their highest since mid-November last year, pushed up by OPEC-led supply cuts and U.S. sanctions against Venezuela and Iran.
An unexpected dip in U.S. crude oil inventories and production also lifted prices, traders said.
Brent crude oil futures marked a 2019-peak of $67.84 per barrel in Asian trading on Thursday, and were trading at $67.76 per barrel at 0605 GMT, up 21 cents, or 0.3 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $58.40 per barrel, up 14 cents, or 0.2 percent, from their last settlement, and also close to November 2018 highs reached the previous day.
“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.
The Organization of the Petroleum Exporting Countries (OPEC) and some non-aligned producers including Russia have been withholding oil supply since the start of the year to tighten global markets and prop up crude prices.
In Venezuela, oil production and exports have been disrupted by a political and economic crisis that has caused massive blackouts and supply shortages, while Washington has barred U.S. companies from doing business with the Venezuelan government, including state-owned oil firm PDVSA.
Amid the turmoil, two storage tanks exploded at a heavy-crude upgrading project in eastern Venezuela on Wednesday, according to an oil industry source and a legislator.
In the Middle East, the United States aims to cut Iran’s crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid U.S. sanctions, two sources familiar with the matter told Reuters.
Meanwhile, a weekly report by the U.S. Energy Information Administration (EIA) said U.S. commercial crude oil inventories fell last week as refineries hiked output.
Crude inventories dropped by 3.9 million barrels in the last week, to 449.07 million barrels, compared with analyst expectations for an increase of 2.7 million barrels.
U.S. crude oil production also dipped, falling by 100,000 barrels per day (bpd) to 12 million bpd.
Many analysts still expect U.S. crude oil production to rise to 13 million bpd later this year or in 2020, offsetting some tightness from the OPEC cuts and U.S. sanctions.
Oil prices could also come under downward pressure from a global economic slowdown.
Growth in China’s industrial output fell to a 17-year low of 5.3 percent in the first two months of the year, official data showed on Thursday, pointing to further weakness in the world’s second-biggest economy.
Reporting by Henning Gloystein in Singapore and Colin Packham in Sydney; Editing by Joseph Radford and Richard Pullin