The price of oil saw a little bump on Thursday on the heels of a drop in crude shipments out of major exporter Saudi Arabia combined with a lift in US oil inventories. As such, crude futures trading narrowed as gains found a balance with the dollar strengthening and equities cooled.
With that, US benchmark West Texas Intermediate (WTI) crude futures settled up 24 cents at $64 per barrel. In addition, Brent crude futures grew 35 cents—which is about half a percent—to $71.91 per barrel, nearing the five-month high of $72.27, reached on Wednesday.
Indeed, US crude, gasoline, and distillate oil inventories all fell, last week, as crude posted unexpected losses in its first four weeks, according to the Energy Information Administration. This data also supports the current price range. And is also supported by a fall in output in Saudi Arabia who saw exports drop by 277,000 barrels per day, just shy of 7 million barrels per day in February.
There are many factors at play when it comes to the price of oil, in America. Sanctions on Venezuela, for example, continue to raise concern over supplies. Looming expiration of US waivers on imports of Iranian oil, however, are perhaps a much more drastic anxiety as new speculation suggests new sanctions on both Venezuela and Iran could increase restrictions that could potentially trigger the end of the OPEC+ deal.
That said, it should also be noted that oil prices tend to follow the momentum of the rest of the equities market. Fortunately the equities market has exhibited decent gains as we approach the extended Easter weekend. With that, prices continue to hold strong, this year, after the OPEC-and-ally agreement (which includes the US, Iran, Venezuela and Russia) to limit oil output to 1.2 million barrels per day.
However, Iran and Venezuela continue to suffer tighter US sanctions as global supply constricts. In fact, Iran’s crude exports have fallen notably in April, dropping to their lowest daily level so far this year. Tanker data suggests, then, that we can continue to expect reduction in buyer interest as part of increased governmental pressure.