The oil prices hit their highest levels on Monday since November 2018. The current increase was due to OPEC-led supply cuts and U.S sanctions on Venezuela, and Iran. The International Brent crude futures were at $66.66 per barrel at 0746 GMT. It is up 41 cents or 0.6% from their last close. Brent earlier climbed to its highest since November 2018 at $66.78 a barrel. The WTI (U.S West Texas Intermediate) crude oil futures were at $56.07 per barrel up 48 cents or 0.9% from their close.
The WTI prices also rose to their highest level on Monday since November 2018 at $56.13 per barrel. Prices have been boosted by a tightening market due to supply cuts organized by the Organization of the OPEC (Petroleum Exporting Countries) and some non-affiliated producers, such as Russia. Last year, the group of producer countries agreed to cut output by 1.2 million barrels per day to avoid a large supply overhang from swelling.
The financial markets, including crude futures, were also generally supported by hopes that the United States and China would soon resolve their trade disputes. The head of research at futures brokerage London Capital Group, Jasper Lawler said, “OPEC production cuts and US sanctions on both Iran and Venezuela are limiting supply. Trade tensions which have weighed on global growth are showing signs of easing boosting sentiment across markets and lifting oil demand prospects”.
News of a fall in Chinese car sales in January had raised concerns regarding the fuel demand in the world’s 2nd largest oil user. An industry association said last month that China’s vehicle sales fell by 15.8% versus the same month in 2018. China recorded the 1st annual drop in vehicle sales on record after the announcement of new energy vehicle sales in January. It includes electric vehicles, registered a 140 percent increase and underlined expectations that oil demand from cars may peak in China during the coming years.