LONDON: Oil prices rose to new 2019 highs on Tuesday, supported by supply cuts from OPEC and falling output from Iran and Venezuela due to US sanctions.
Brent crude oil futures were up $0.55 at $68.09 per barrel at 1145 GMT, having earlier risen to a new 2019 high of $68.16 a barrel, their highest since November 2018.
US West Texas Intermediate (WTI) futures were at $59.47 per barrel, up $0.38 from their last settlement. They have also risen on Tuesday to their highest since November 2019 of $59.57 a barrel.
OPEC to scrap April meeting but keep oil cuts in place
The Organisation of the Petroleum Exporting Countries (OPEC) scrapped on Monday its planned meeting in April, effectively extending supply cuts that have been in place since January until its next regular meeting in June.
OPEC and a group of non-affiliated producers including Russia, known as OPEC+, cut supply in 2019 to halt a sharp price drop which began in the second half of 2018 due to booming US production and fears of global economic slowdown.
Saudi Arabia has signaled that OPEC and its allies may continue to restrain oil output until the end of 2019.
"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.
Prices have been further supported by US sanctions against oil exports from Iran and Venezuela, traders said.
Venezuela has suspended its oil exports to India, one of its key export destinations, the Azeri energy ministry said on Tuesday, citing Venezuela's oil minister.
Because of the tighter supply outlook for the coming months, the Brent forward curve has gone into backwardation since the start of the year, meaning that prices for immediate delivery are more expensive than those for dispatch in the future, with May Brent prices around $1.20 per barrel more expensive than December delivery Brent.
For boosting exports, Pakistan must conduct deep study of Saudi Arabian market
Outside OPEC, analysts are watching US crude oil production, which has risen by more than 2 million barrels per day (bpd) since early 2018, to around 12 million bpd, making the US the world's biggest producer ahead of Russia and Saudi Arabia.
Weekly output and storage data will be published by the Energy Information Administration (EIA) on Wednesday.
Bank of America Merrill Lynch said in a note that economic "risks are skewed to the downside" and that "we forecast global demand growth of 1.2 million bpd year-on-year in 2019 and 1.15 million bpd during 2020".
The bank said it expected "Brent and WTI to average $70 per barrel and $59 per barrel respectively in 2019, and $65 per barrel and $60 per barrel in 2020."