Oil prices edge closer to 2019 highs amid OPEC-led supply cuts and US sanctions

New Delhi: Boosted by US sanctions against oil producers Venezuela and Iran and prolonged OPEC-led oil supply curbs, oil prices edged closer to its 2019 highs on Tuesday. Traders say the market may be capped by increasing US output. With the Organization of the Petroleum Exporting Countries (OPEC) doing away with its planned meeting in April, it effectively extends supply cuts until June at least, when the next meeting is scheduled.

Brent crude reached 2019 peak

At 0314 GMT, US West Texas Intermediate (WTI) futures were at US$ 59.10 per barrel, identical to their last settlement and close to the 2019 high of US$ 59.23 reached the previous day. Brent crude oil futures were up 10 cents, or 0.6 percent, to US$ 67.54 a barrel, close to the 2019 peak of US$ 68.14 reached last week.

In China, Shanghai crude futures, released last March, jumped 4.5 percent from their last close to 467.6 yuan (US$ 69.64) per barrel. It was also close to its 2019 highs of 475.7 yuan a barrel reached during a brief spike last month.

OPEC and OPEC+, a group of non-affiliated producers including Russia, began holding back supply to stop a sharp price drop in the second half of last year. This was when markets were pressurised from surging output along with an economic slowdown.

Crude prices stabilised by OPEC deal

"The OPEC deal has brought stability to crude prices and signs of an extension have taken crude higher," said Alfonso Esparza, senior market analyst at futures brokerage OANDA.

Traders say prices have been helped by US sanctions against oil exports from Venezuela and Iran