Prices for petroleum rose on Wednesday towards five-month highs hit the previous day as production cuts by the Organization of the Petroleum Exporting Countries and U.S. sanctions on Iran and Venezuela continued to tighten supply, though economic worries increased.
Brent crude futures, the international benchmark for oil prices, were up 33 cents, or half a percent, at $70.94 U.S. per barrel mid-morning Wednesday. U.S. West Texas Intermediate crude oil futures rose 40 cents to $64.38 U.S. per barrel.
Oil markets have tightened this year because of U.S. sanctions on oil exporters Iran and Venezuela, as well as supply cuts by OPEC and some non-affiliated producers including Russia, a group known as OPEC+.
Supplies from OPEC dropped by half a million barrels a day in March to a four-year low as Saudi Arabia continued to curb production. The monthly output cut totals about half a percent of global crude demand.
Brent and WTI crude oil futures have risen by more than 30% and 40% respectively since the start of the year.
The OPEC monthly report released on Wednesday showed that Venezuela’s oil output sank last month to a long-term low below one million barrels per day, due to U.S. sanctions and blackouts.
Russia’s role in global supply has also came into focus after a senior Russian official signaled that Moscow might seek to raise output, though President Vladimir Putin indicated on Tuesday that current prices suited Russia.
U.S. crude stocks rose by 4.1 million barrels to 455.8 million barrels in the week to April 5, data from industry group the American Petroleum Institute showed on Tuesday.
But in its third downgrade on global growth since October, the International Monetary Fund warned on Tuesday that the global economy was slowing more than expected and a sharp downturn may be looming.
