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Oil hits $69 a barrel

by CredibleNews

Oil price may jump above $69 dollars a barrel, the highest this year. The rise comes amidst  prospects that more sanctions against Iran and more Venezuelan disruptions could deepen the Organisation of Petroleum Exporting Countries, OPEC-led supply cut.

The United States of America is considering more sanctions against Iran whose oil exports have been halved by existing measures, even as a key crude terminal in Venezuela, also under U.S. sanctions,  halted operations again.

Brent crude rose 10 cents to $69.11 a barrel by 0826 GMT, having touched $69.50, the highest since mid-November. U.S. crude was up 11 cents at $61.70 after rising above $62 for the first time since early November.

“The supply cuts have been there for a while but Venezuela is not improving. That is taking a lot of oil away from the market,” Olivier Jakob, an analyst at Petromatrix, said.

More supply losses from Iran and Venezuela could widen an OPEC-led production cut that took effect in January, designed to prevent a price-sapping rise in inventories.

Supply from the Organization of Petroleum Exporting Countries hit a four-year low in March, a Reuters’ survey found, because top exporter, Saudi Arabia cut more than it had agreed to and due to the involuntary declines.

This week’s reports on U.S. supplies are expected to show crude inventories fell, a sign that OPEC curbs are having the impact producers intended.

Six analysts polled by Reuters estimated, on average, that crude stocks fell by 1.2 million barrels in the week to March 29. The first of this week’s supply reports, from the American Petroleum Institute, is due at 2030 GMT.

Oil’s pattern on the price charts could lead to further gains. Brent is trading just below the 200-day moving average and a move above this mark would provide additional technical support, Jakob said.

Healthy data on the world’s biggest economies, the United States and China, also bolstered prices.

Figures showing a rebound in U.S. factory activity in March and a return to growth in Chinese manufacturing eased concern that an economic slowdown could weaken oil demand. “China’s PMI number was the most significant monthly increase since 2012, which should ease concerns around a potential threat to oil demand,” he said

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