Brent crude oil prices have slipped from 2019 highs due to economic concerns that countered supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and the partial closure of an offshore oil field in Saudi Arabia.
Brent crude rose as far as $65.10 before falling back to $64.69, while US West Texas Intermediate (WTI) crude futures increased by four cents at $54.45 per barrel, Reuters reported.
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Traders said that prices were buoyed by the partial shutdown of the Safaniyah offshore oil field in Saudi Arabia earlier this week. The field produces more than one million barrels per day (Mbpd).
The field was closed after the main power cable was cut by a vessel’s anchor.
According to a source, the timeline as to when the when the field would return to full capacity was not immediately clear.
The partial closure comes on top of voluntary OPEC-led supply cuts, of which Saudi Arabia aimed at tightening the market.
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By GlobalDataLast year, the oil cartel along with some non-OPEC producers, including Russia, agreed to cut crude output by a joint 1.2Mbpd.
Saudi Arabia said it will cut even more in March than it agreed in the deal.
US investment bank Jefferies was quoted by the news agency as saying: “Maintenance season finally materialised this week, with US refinery utilisation decreasing by a sharp 480 basis points week-on-week to 85.9%.”
Last year, crude production in the US increased by more than 2Mbpd to 11.9Mbpd.
Most analysts expect the output to exceed 12Mbpd in the near future.
