Oil prices have hit a two-month high to rise above $63 a barrel due to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and sanctions imposed by the US against Venezuela that offset forecasts of a global economic slowdown.

Brent crude LCOc1 rose 49 cents at $63.24 and later hit $63.40 a barrel, while US crude CLc1 was up 9 cents at $55.35, Reuters reported.

In January, the oil cartel and its members started a new round of supply cuts, which were led by Saudi Arabia and have been compounded by involuntary losses.

Despite OPEC’s supply cuts, the US is increasing its supply.

Nonetheless, figures revealed a fall in the US rig count to their lowest in eight months, lifting oil prices.

"There’s no sign of overhang in the crude oil markets."

Petromatrix oil analyst Olivier Jakob said: “You have the sanctions on Venezuela, on top of the reduced supply from Saudi Arabia.

“There’s no sign of overhang in the crude oil markets.”

According to a survey by the news agency, OPEC supply declined in January by the largest amount in two years.

Analysts said that the sanctions imposed by the US on Venezuela’s state-run oil firm PDVSA are expected to restrict oil transactions between Venezuela and other countries.

The primary reason for a fall in oil prices is the concern about a potential slowdown in demand this year due to a weaker outlook for economic growth and developments such as the trade war between the US and China.