Oil hovers below six-month high amid some easing of
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[April 24, 2019]
By Shadia Nasralla
LONDON (Reuters) - Oil prices slipped below
six-month highs on Wednesday after signs that cushioned a rally based on
fears of tight supply resulting from OPEC output cuts and U.S. sanctions
on Venezuela and Iran.
U.S. crude stocks rose by 6.9 million barrels last week, more than
expected, data from the industry group American Petroleum Institute
showed on Tuesday. Official stocks figures are due at 1430 GMT on
"The focus will return today to the micro-picture of the U.S. data,"
Petromatrix's Olivier Jakob said in a note.
Also bearish, the International Energy Agency, a watchdog for
oil-consuming countries, said on Tuesday markets are "adequately
supplied" and that "global spare production capacity remains at
Brent crude futures were at $74.37 per barrel at 1047 GMT, down 14 cents
from their last close. The benchmark is still set for its fifth
consecutive weekly gain.
U.S. West Texas Intermediate crude futures were at $65.97 per barrel,
down 33 cents - not enough to steer them away from what is set to be
their eighth week of gains.
Crude oil prices for spot delivery rallied after the United States said
on Monday it would end all exemptions for sanctions against Iran,
demanding countries halt oil imports from Tehran from May or face
China, Iran's biggest oil customer, has formally complained about the
The spot price surge has put the Brent forward curve into steep
backwardation, in which prices for later delivery are cheaper than for
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Pumpjacks are seen against the setting sun at the Daqing oil field
in Heilongjiang province, China December 7, 2018. Picture taken
December 7, 2018. REUTERS/Stringer
The United States has said it saw Saudi Arabia as a partner to balance oil
"The (Saudi) kingdom will be relied upon to work with other producers to keep
markets adequately supplied," PVM said in a note.
But some analysts said the market remained fundamentally bullish.
"The factors that could lead to higher prices are overwhelming," said Carsten
Fritsch at Commerzbank, adding a push toward $80 a barrel was more likely than a
fall below $70.
Signaling no immediate action to counteract missing Iranian barrels, Saudi
Energy Minister Khalid al-Falih said on Wednesday that his country's production
in May would not vary greatly from previous months.
He added that Saudi Arabia aimed to stick to its output quota fixed in a deal by
the Organization of the Petroleum Exporting Countries, Russia and others, but
that June numbers would be determined depending on customers' needs.
(Additional reporting by Henning Gloystein in Singapore; Editing by Alexandra
Hudson and Dale Hudson)
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