Investing.com - U.S. crude pressed higher on Monday, hitting fresh 2019 highs, while OPEC-led production cuts and U.S. sanctions supported bulls and traders turned their attention to data on U.S. crude inventories.
New York-traded West Texas Intermediate crude futures gained 5 cents, or 0.5%, at $61.87 a barrel by 7:58 AM ET (11:58 GMT). It had topped the $62-mark earlier on Tuesday for the first time since last November.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., slipped 4 cents, or 0.1%, to $68.97, pulling back from its intraday high of $69.50.
Better-than-expected readings of manufacturing activity in the U.S. and China released this week eased concerns over the potential negative impact on oil demand from a slowing global economy.
Aggressive production cuts led by OPEC in 2019 sparked a rally of more than 30% during the first quarter, while a Reuters’ survey showed that the cartel’s oil supply sank to a four-year low in March. Saudi Arabia led the charge by reducing output more than promised, while U.S. sanctions against Iran and Venezuela, along with power outages, contributed to the reduction in supply.
Markets took Tuesday’s news that Russia fell short of its oil-output cut target for March in stride, while at the same time deepening its curbs. Russian Energy Minister Alexander Novak had previously stated that April would be the first month that Moscow achieved full compliance in its agreement with OPEC.
Investing.com senior commodity analyst Barani Krishnan added ongoing declines in U.S. drilling activity to the list of bullish factors and called it “a perfect storm for traders and funds caught on the short side of the market”.
Later on Tuesday, traders will turn their attention to weekly data on U.S. crude inventories. The American Petroleum Institute is due to release its weekly report for the week ended March 29 at 4:30PM ET (20:30 GMT).
That’s ahead of Wednesday’s release of the official government data from the Energy Information Administration amid expectations for a draw of 1.2 million barrels.
In other energy trading, gasoline futures gained 0.3% to $1.9044 a gallon by 8:01 AM ET (12:01 GMT), while heating oil advanced 0.3% to $1.9937 a gallon.
Lastly, natural gas futures traded down 0.1% to $2.705 per million British thermal unit.