Crude oil prices are rising on Friday, backed by the OPEC+ quota deal and the US sanctions against Iraq and Venezuela. Moreover, the oil markets are set to send the first quarter of the year with the fastest rate of increase of prices since 2009.
The futures on US crude oil WTI appreciated by 0.40% to 59.54 USD per barrel. WTI is expected to report a weekly rise in its prices for the fourth consecutive week, while the accumulated increase in the first quarter is 31%.
Meanwhile, the Brent variety rose by 0.28% to 68.01 USD per barrel. So far, weekly growth has reached 1.7% and for the first quarter, the accumulated growth is 27%.
For both oil variety, the first quarter of 2019 is their best performance since the second quarter of 2009, when WTI and Brent grew by about 40%.
The crude oil prices were supported mostly by OPEC+ quota deal, limiting production of OPEC countries and non-cartel producers, including Russia, by 1.2 million barrels per day.
The rise in prices has once again prompted US President Donald Trump to call on OPEC to increase production to lower prices.
The OPEC+ group will meet in June to discuss whether to continue with supply constraints or to abandon market intervention.
Saudi Arabia is showing signs that it is willing to continue to produce less oil in 2019, but Russia, which reluctantly joins the agreement, shows less willingness to continue, especially after September.
But the OPEC+ quota deal is not the only reason for rising black gold prices. The US sanctions imposed on oil exports from Iran and Venezuela are also contributing to the appreciation of the commodity.
Analysts, however, are worried about future oil demand amid worrying signals that the global economy is heading to recession.
Bank of America expects oil prices to rise even in the short-term. They forecast, Brent variety to reach an average price of 74 USD per barrel in the second quarter of the year.
But the investment bank warns that there is a risk of recession in 2020.
US crude oil inventories
The US commercial crude oil stockpiles rose by greater volumes than expected, but the spike was offset by a nearly equal draw of refined gasoline inventories.
The US Energy Department said that crude stocks jumped by 2.8 million barrels while gasoline storage fell by 2.9 million barrels. Total petroleum stocks increased by about 100,000 barrels when factoring in other products, according to Energy Information Administration data.
Stockpiles at the Cushing, Oklahoma, oil storage hub increased by 541,000 barrels to 46.9 million barrels.
The US crude oil production remains at an estimated record high of 12.1 million barrels per day, nearly a quarter of which is exported in crude form.
A new Middle East oil alliance was established
A new bloc is emerging in the greater Middle East with the declared objectives of dominating the entire Arab world, confronting and containing the US and its allies, controlling and benefiting from the entire hydrocarbon economy, from production to transportation.
The leading members of the new bloc are Turkey, Iran, and Qatar, with Iraq, Syria, Lebanon, and Jordan submitting to the new bloc.
The experts call the new bloc “the Middle Eastern Entente”.
The roots of “the Middle Eastern Entente” are in Doha, as Saudi Arabia and the GCC allies blocked their diplomatic relations with Qatar in 2017.