Oil prices rose sharply on Friday thanks to a favorable international geopolitical backdrop for rising prices, allowing the London-listed barrel to close above $70
for the first time since November 2018.
Brent North Sea crude for June delivery ended at 70.34 dollars in London, up 94 cents from Thursday’s close.
In New York, WTI barrel for the May contract gained 98 cents to $63.08, its highest level since November as well.
“Expectations of extending OPEC’s cuts in production continue to support prices,” said Gene McGillian of Tradition Energy.
The Organization of the Petroleum Exporting Countries and its Russian partner have again pledged to reduce their production in the first half of 2019 in an agreement, some of which anticipate the extension until the end of the year.
Prices are also supported by unintended production cuts. Recently focused on Iran and Venezuela, both under US sanctions, the market has also recently turned towards Tripoli.
Allied forces in Libya on Friday repulsed rival fighters engaged in an offensive to take the capital, clashes likely to plunge the country into a new conflict.
“The risks of civil war are predicting a decline in crude exports,” McGillian said.
The specialist also cited the progress on the trade front between Beijing and Washington that less fear a slowdown in global growth and therefore the demand for crude oil from China.
The price rise came despite a surge in the number of active US drilling wells, a statistic released every Friday by Baker Hughes that provides a snapshot of what US production will be in a few weeks.
Fifteen new wells were added to the existing ones, but “the market did not really pay attention,” Gene McGillian observed.
US production set a new record this week as the US Energy Information Agency (EIA) reported in a weekly report that the United States produced 12.2 million barrels a day on average during the week ended March 29th.