Crude Oil Trades Roughly Flat as Supply Risks offset Rising US Crude Stockpiles

Gold Silver Reports – Brent crude oil held above $71 a barrel on Tuesday, supported by falling Venezuelan and Iranian exports and fighting in Libya that raised concerns of more supply threats, outweighing expectations of higher U.S. inventories.

In Libya, fighting between Khalifa Haftar’s Libyan National Army and the internationally-recognized government has raised the prospect of lower supplies from another OPEC member. U.S. sanctions on two others, Iran and Venezuela, are cutting shipments.

“Collapsing Venezuelan oil output and sanctioned Iranian exports have a put big question mark over supply,” said Norbert Ruecker of Swiss bank Julius Baer.

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“With the many supply threats, the market mood turns more bullish by the day and this should support prices over the coming weeks.”

Brent crude, the global benchmark, was down 4 cents at $71.14 a barrel around 11 a.m. ET (1500 GMT). U.S. West Texas Intermediate crude gained 8 cents to $63.48.

Adding downward pressure were expectations of higher U.S. inventories and concern about Russia’s willingness to stick with OPEC-led supply cuts.

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Analysts on average expect U.S. crude stockpiles to have risen by 1.9 million barrels last week, the fourth straight increase. The first of this week’s stockpile reports is due at 4:30 p.m. ET (2030 GMT) from the American Petroleum Institute.

While OPEC-led supply cuts have boosted Brent by more than 30 percent this year, gains have been limited by worries that slowing economic growth could weaken demand for fuel.

Oil fell on Monday after comments from Russia raised concern the OPEC-led supply-cutting pact may not be renewed.

Russia and the producer group may decide to boost output to fight for market share with the United States, TASS news agency quoted Finance Minister Anton Siluanov as saying.

OPEC and other producers including Russia, an alliance known as OPEC+, have been cutting output since Jan. 1. They decide in June whether to continue the arrangement.

“There is a growing concern that Russia will not agree on extending production cuts and we could see them officially abandon it in the coming months,” said Edward Moya, senior market analyst at OANDA.

Russian officials sent mixed signals over renewal of the deal with OPEC last time it was being renegotiated in December, before finally agreeing to remain on board. – Neal Bhai Reports (NBR)

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600