The general laws of economics aren’t being reflected in the oil market’s major benchmarks for now. US sanctions on Venezuelan and Iranian oil as well as output cuts by the Saudi Arabia-led OPEC+ group are creating a shortage of heavy to medium “sour” crude that’s sulfurous and dense.
Oil prices were little changed on Wednesday even after US government data showed a surprise increase in crude inventories, as OPEC-led output cuts and US sanctions kept the supply outlook tight enough to hold futures near five-month highs.
India’s import of oil from Venezuela is almost nil since the country’s infrastructure is not up to the mark, say sources. The bilateral trade between the two countries is at $ 6 billion and is in the favour of Venezuela due to oil imports by India.
Oil prices edged up on Monday after Saudi oil minister Khalid al-Falih said an end to OPEC-led supply cuts was unlikely before June, while a report showed U.S. drilling activity fell for a third straight week.
Hedge funds keep betting on an oil rally, even with prices stuck in neutral. Investors pushed bullish wagers on West Texas Intermediate crude prices to their highest in a month and cut short-selling bets to the lowest since October, apparently convinced that dwindling global supplies will be more than enough to withstand a weaker economy.
Oil prices fell on Tuesday as China cut its 2019 economic growthtarget, dimming the outlook for fuel demand, although OPEC-led efforts to cut output still offered some support.
Oil prices expected to remain range bound at USD 55-65 per barrel due to a rise in supply from the US, debt crisis in Venezuela and the limited clarity on the sanctions on Iran, a report said.
The fall in oil prices will increase pressure for consolidation in the oil and gas industries where scale will help companies to win exploration licences or services partners, Dirk Warzecha, chief operating officer of Germany’s DEA said.
Oil prices firmed on Monday after data showed China’s economic slowdown was not as big as some analysts had expected, with supply cuts led by the Organization of the Petroleum Exporting Countries also offering
Oil prices rose by 1 percent on Friday after a report from the Organization of the Petroleum Exporting Countries (OPEC) showed its production fell sharply last month, easing fears about prolonged oversupply.