Oil prices gain as IEA reports supply cuts

Oil prices gained on Friday in Asia as the International Energy Agency’s (IEA) said there are signs of tightening supply.

US Crude Oil WTI Futures rose 0.4% to $63.84 by 1:30 AM ET (05:30 GMT). International Brent Oil Futures also gained 0.4% to $71.08.

Supply has been tightened thanks to production curbs led by the Organisation of the Petroleum Exporting Countries (OPEC) and US sanctions on Iran and Venezuela, the IEA said,

OPEC’s supply cuts and U.S. sanctions against Iran and Venezuela have helped push up oil prices by more than a third so far in 2019.

Venezuela pumped 960,000 bpd in March, a drop of almost 500,000 bpd from February, OPEC’s April report on Wednesday said.

OPEC and other non-member producers have been reducing output by 1.2 million bpd since the beginning of the year. The producers are due to meet on June 25-26 to decide whether to extend the pact.

However, the IEA also warned that the demand side is also a “very important” piece of the equation for oil market rebalancing, and it was facing a wall of uncertainty given the outlook for global growth.

“As far as 2019 is concerned, amongst the analyst community there is an extraordinarily wide divergence of view as to how strong growth will be,” the IEA said. “We maintain our forecast of 1.4 million barrels per day, but accept that there are mixed signals about the health of the global economy, and differing views about the likely level of oil prices.”