WTI: Downside opening up towards $ 63.50 amid rising United States supplies

Oil climbs to 5-month high amid OPEC cuts, US sanctions, Libya fighting

This, analysts say, is a result of the kingdom's determination to support oil prices in line with a production cut deal between OPEC countries and non-member Russian Federation that is to run until June.

The U.S.' Energy Information Administration (EIA) said Wednesday commercial crude oil inventories in the country increased by 7 million barrels for the week ending April 5, against a market expectation of 2.3 million barrels.

The EIA expected that West Texas Intermediate crude oil prices will average 8 dollars per barrel lower than Brent prices in the first half of 2019 before the discount gradually falls to 4 dollars per barrel in late-2019 and through 2020.

But these developments are unlikely to hold any sway over the market as long Saudi Arabia continues to back the production cut deal as aggressively as it has done so far.

Brent and WTI futures have risen by 40% and 30% respectively since the start of the year.

Despite this growth in U.S. supply, global oil markets remain tight amid supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), U.S. sanctions on oil exporters Iran and Venezuela, and escalating fighting in Libya.

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The Dutch bank said the reduction was not only down to voluntary supply cuts, which the group started this year to prop up prices, but also involuntary curbs from Venezuela and Iran - which are exempt from the OPEC cut pact - due to USA sanctions.

Global oil demand is estimated to average 99.91 million b/d this year, compared with 98.70 million b/d in 2018, OPEC said. "Declines from these two exempt countries account for nearly 47 percent of the reduction seen from OPEC", ING said.

According to the ministry, daily oil production reached 798,000 barrels in Azerbaijan in March, of which 714,000 accounted for oil, 84,000 - for condensate.

It sees United States crude oil averaging $59.50 per barrel, up from its last forecast of $55.50.

Restrictions at the busiest US energy port for days after a massive petrochemical fire and spill near Houston led to a backlog of vessels in late March.

On the demand side, there are concerns that an economic slowdown will soon hit fuel consumption. Yet the gains have been capped by fears about global economic growth, which the International Monetary Fund predicts will this year be the weakest since the financial crisis a decade ago.

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