Oil prices eased from 2019 peaks on Friday as economic growth concerns weighed on sentiment, pausing a three-month rally driven by OPEC-led supply cuts and US sanctions against Iran and Venezuela.
Brent crude oil futures were at $67.72 per barrel at 0419 GMT, down 14 cents, or 0.2 percent, from their last close. Brent hit a four-month high of $68.69 per barrel the day before.
U.S. West Texas Intermediate (WTI) futures were at $59.84 per barrel, down 14 cents, or 0.2 percent from their last settlement. WTI also hit a 2019 peak at $60.39 the previous day.
“Global economic growth still remains a concern,” said Sukrit Vijayakar, director of energy consultancy Trifecta.
Economic growth has slowed across Asia, Europe and North America, potentially denting fuel consumption.
Oil prices this year have been propped up by supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies such as Russia, often referred to as ‘OPEC+’.
Canadian investment bank RBC Capital Markets said oil was “still below the fiscal breakeven level in a number of OPEC countries”, meaning that many producers have an interest in further propping up the market.
“With the driver of the OPEC bus, Saudi Arabia, showing no signs of wavering in the face of renewed pressure from Washington, we believe that OPEC is likely to extend the deal for the duration of 2019 when they next assemble in Vienna in June,” RBC said.
RBC said Russia was only a reluctant partner in the supply cuts, but would “ultimately opt to preserve the arrangement and retain a leadership role of a 21-nation group that accounts for around 45 percent of global oil output”.
Beyond OPEC and Russia’s supply policy, oil prices have also been boosted by U.S. sanctions on OPEC-members Iran and Venezuela.
Iranian crude oil shipments have averaged just over 1 million bpd in March, down from 1.3 million bpd in February and a 2018 peak of at least 2.5 million bpd in April, before the U.S. sanctions were announced.
Venezuelan crude oil production has also dwindled amid U.S. sanctions and an internal political and economic crisis, plunging from a high of more than 3 million bpd at the start of the century to not much more than 1 million bpd currently.
Further price increases have also been crimped by a jump of more than 2 million bpd in U.S. crude oil production since early 2018 to a record 12.1 million bpd, making the United States the world’s biggest producer ahead of Russia and Saudi Arabia.
Soaring U.S. output has resulted in increasing exports, which have doubled over the past year to more than 3 million bpd.
The International Energy Agency (IEA) estimated that the United States would become a net crude oil exporter by 2021.