Crude oil prices rose Tuesday amid expectations of more production declines in Venezuela and Saudi Arabia, but broader economic concerns capped gains.
West Texas Intermediate crude future prices rose 0.5 percent to $57.05 per barrel as of 8: 29 a.m. EST while Brent crude rose 0.5 percent to $66.93 per barrel.
Brent started the year just under $55 per barrel, compared with a high of over $86 per barrel on Oct. 3. Brent reached its highest price so far for this year at $67.25 per barrel on Feb. 22.
“Crude oil trades higher for a second day with no major change in the themes currently driving the price behavior,” Ole Hansen, head of commodity strategy at Saxo Bank, told UPI.
“A nationwide blackout in Venezuela has further reduced production while Saudi Arabia has said it plans to make even deeper cuts in April. Against this, traders and funds with a macroeconomic focus continue to struggle getting too excited by oil’s upside potential,” Hansen added.
Venezuela has seen a nationwide power failure since Thursday night, which has already left much of the country also struggling for power as pumps need electricity. There have been severe disruptions in transportation, and schools and businesses closed Friday and Monday.
There is much information to come during the rest of the week with possible news from the IHS Markit-organized CERA Week, as well as monthly oil market reports from the Energy Information Agency Tuesday followed by OPEC on Thursday and IEA on Friday, he said.
Traders are also alert to potential foreign exchange variations. Investors are alert as to the result of a coming vote in the United Kingdom’s parliament separating from the European Union, widely referred to as Brexit.
“While not directly impacting oil it could have an indirect impact through a potential major move in forex market,” Hansen said.