Oil up 1 percent as market focuses on supply risks

Catogory : Market Report

Oil prices rose 1 percent, as Venezuelan and Iranian exports raised concerns over tightening global supply, but uncertainty surrounding an OPEC-led production cut limited gains. Brent crude futures rose 54 cents, or 0.8 percent, to settle at $71.72 a barrel. U.S. West Texas Intermediate (WTI) crude futures gained 65 cents, or 1 percent, to settle at $64.05 a barrel. Prices extended gains in post-settlement trade after data from industry group the American Petroleum Institute showed that U.S. crude inventories fell unexpectedly last week, dropping by 3.1 million barrels, expectations of a 1.7 million-barrel build. Gasoline stockpiles fell by 3.6 million barrels, the API said, more than forecasts of a 2.1 million-barrel drop.U.S.

U.S. sanctions on two other members, Iran and Venezuela, are already cutting shipments. Iran’s crude oil exports have dropped in April to their lowest daily level this year, tanker data showed and industry sources said. “Global supply is falling faster than people think. The market is imbalanced,” source said. “The continuing loss of Venezuelan oil is going to take its toll. The OPEC cuts are going to take their toll. “Adding downward pressure, however, were concerns about Russia’s willingness to stick with OPEC-led supply cuts and expectations of higher U.S. inventories. Oil prices have gained this year more than 30 percent, helped by the deal between the Organization of the Petroleum Exporting Countries and other producers including Russia The group has been cutting output since Jan. 1 and will decide in June whether to continue the arrangement.