Oil prices rose more than 1 per cent on Monday, supported by Middle East tensions and OPEC-led supply cuts as well as continued crude disruptions from Russia after a contamination problem discovered in April, Reuters has reported last month.
Voluntary output reductions by OPEC and allies, plus those resulting from US sanctions, have helped Brent crude rise by about 29 per cent this year. Brent settled at $70.11, rising $1.42, or 2.07 per cent, after having fallen by about 4.5 per cent last week.
Tensions between the US and Iran, with Washington’s announcement last Friday it would deploy more troops to the Middle East, raised the prospect of supply disruptions and supported prices. Russia’s oil production continued to fall in May under pressure from lower exports after shipments via the Druzhba pipeline to Europe were found to be contaminated in April.
Kuwait’s Oil Minister Khaled Al Fadhel said the market was expected to be in balance. “We still have some more work to do. I believe the market is expected to be balanced during the 2nd half of 2019, more towards the end of the year,” he said. In addition to the OPEC-led supply cuts, US sanctions on OPEC members Iran and Venezuela have curbed their crude exports, reducing supplies further.