Global oil prices edged up as supply cuts led by oil cartel Organization of the Petroleum Exporting Countries (OPEC) continue to drive the market.
According to the IMF, the global economy will likely grow at 3.3% in 2019, which is the slowest growth pace since 2016.
International benchmark Brent futures gained 15 cents to touch $70.76 per barrel while US West Texas Intermediate (WTI) crude oil futures jumped 22 cents to trade at $64.20 a barrel, Reuters reported.
Earlier this week, both oil benchmarks touched their five-month high, but slipped from peak levels due to global economic slowdown concerns. Brent and US WTI crude oil prices have jumped by 30% and 40% since the beginning of 2019. The rise is due to the tightening of the market over supply cuts by OPEC+, a group comprising OPEC members and other key producers such as Russia.
In a note, Dutch bank ING told Reuters: “The global oil market is clearly moving back towards balance thanks to OPEC+ production cuts. OPEC production has fallen 1.98 million barrels per day (Mbpd) from October levels.”
It also added that the volume drop is due to voluntary supply cuts as well as sanctions on Venezuela and Iran. Oil output in Venezuela declined from 1.19 Mbpd in October last year to 890,000 bpd in March this year, while in Iran it dropped from 3.33 Mbpd to 2.71 Mbpd, said ING.
On the supply side, rising US production have capped the global oil prices from further increase. US oil output increased by more than 2 Mbpd since early last year. Industry group the American Petroleum Institute reported that crude stocks in the country increased by 4.1 million barrels in the week to 5 April.