On Tuesday, the crude oil prices of Brent consolidated above $70 per barrel. Since supply cuts led by producer club OPEC and United States sanctions on Venezuela’s and Iran’s fuel exports prevailed over concerns about slowdown of the economy.
The global benchmark for oil prices for front-month Brent crude futures was at $70.14 at 0218 GMT which was 3 cents higher than the closing of the last session when Brent rose was 2.1%.
United States WTI (West Texas Intermediate) crude futures were at $59.21 per barrel on Friday up 58 cents or 1% from their last close. On Monday, there were no trade activities from WTI because in the United States.
Rates have been supported by supply cuts which were led by the OPEC (Organization of the Petroleum Exporting Countries) since the starting of the year. Some other allies including Russia and OPEC will discuss output policy going forward on a meeting on June 25 and 26.
On Tuesday, ANZ bank said, “The issues of supply-side returned to the fore, with prices of crude oil increasing very strongly.”
Further, than the OPEC cuts, United States sanctions on petroleum exports from Venezuela and Iran and have also constricted markets.
It also added, “As U.S. sanctions bite, Iran exports remain under pressure. This comes as OPEC emerges to be heading towards expanding the existing production cut agreement”
Last year, Donald Trump withdrew the USA from the 2015 international nuclear deal with Iran. Washington is ratcheting up sanctions looking to stop international sales of crude oil from Iran and strangulate its economy.
Sanctions on Venezuela’s oil exports were imposed by Washington in a bid to collapse the government under Nicolas Maduro who was the President there.
Even though, markets remain cautious along with the slowdown of economy as a consequence of the continuing trade war between the China and United States which is also estimated to dent the consumption of fuel.
At futures brokerage OANDA, a senior market analyst Jeffrey Halley said the trade frictions doomed “recovery of oil is fragile.”