Oil hits four-month highs with support from tightened supply

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"USA sanctions on Venezuelan petroleum products have cemented support for oil prices", said Benjamin Lu of Singapore-based brokerage Phillip Futures. This was led by a drop in supply from Venezuela - exempt from the Opec cut but under USA sanctions - and a further voluntary reduction by Saudi Arabia. The price of futures contracts of WTI crude oil went up by 0.58% to $58.6 per barrel, TASS reported.

Oil prices were mixed on Thursday after hitting 2019 highs as OPEC stressed the need to extend its production cut program past June while lowering its forecast for crude demand.

By 15:07 GMT, the crude Brent for the world benchmark was $ 67.22 a barrel, an increase of 55 cents or 0.82 percent over the previous closing.

OPEC sources have said an extension of the supply-cutting pact is the likely scenario. U.S. crude oil exports have also increased as domestic production has risen.

EIA expected these trends "to continue over the next several years".

In a monthly report, the Organization of the Petroleum Exporting Countries said 2019 demand for its crude would average 30.46 million barrels per day, 130,000 bpd less than forecast last month and below what it is now producing. The agency also slightly reduced it's 2020 predictions, bringing it's forecast down from 13.2 million barrels a day down to 13 million.

Brian Stutland, chief investment officer at Equity Armor Investments, said, "We're seeing some supplies tighten a little bit.and also the correlation between oil and the stock market and demand coming back into the picture has sort of driven it: oil lagged a little bit as the dollar strengthened, and I think it's trying to play catch-up". It kept its forecast for growth in global oil demand this year unchanged at 1.24 million bpd.

Raw stocks at the Kacheng delivery office in Oklahoma fell by 1.1 million barrels, the institute said.

In China, official statistics showed refinery crude oil use hit a record. Meanwhile, distillates stockpiles unexpectedly increased by 0.38 million barrels.

EIA's data also showed that on the exports side, US crude oil exports increased while domestic production rose as well.

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