Oil up almost two percent on Saudi and OPEC cuts

Opec oil production falls as Saudi Arabia slashes output

Opec oil production falls as Saudi Arabia slashes output

The global oil market remains well supplied, the International Energy Agency said in its monthly market report on Wednesday, and output should still outstrip demand this year.

The agency also lowered its forecast for demand for OPEC crude, production of which the group has pledged to cut by 800,000 bpd this year as part of an agreement with Russian Federation and other non-OPEC producers such as Oman and Kazakhstan.

"Preventing crude prices from falling much further have been U.S. sanctions on Venezuela, targetting its state-owned oil firm PDVSA".

"I seek your firm support and collaboration to jointly denounce and face this shameless dispossession of. important assets of one of the members of OPEC". The group made a strong start to the strategy, slashing output by 930,000 bopd to the lowest in nearly four years, the IEA said.

Exports would fall in March to 6.9 million bpd, according to the article published on Tuesday.

Brent has struggled to sustain gains this month following its best ever start to a year on concern that booming shale output will undermine cuts by OPEC and its partners, and fears that the U.S.

In the lead up to the November granting of waivers by the United States, oil prices had jumped to a four-year high as the market anticipated the loss of Iranian barrels.

"In terms of crude-oil quantity, markets may be able to adjust after initial logistical dislocations", said the Paris-based IEA, which advises major economies on energy policy.

"So far, there are no signs that other producers, e.g".

Since January 1, an OPEC-led group has been cutting at least 1.2 million barrels per day from production in an effort to trim the global supply and stabilize prices.

The U.S. Treasury's guidance, which appears deliberately unclear, has left many third-country buyers uncertain about whether they can do business with PDVSA without also falling foul of sanctions.

Before U.S. sanctions came into force at the end of January, Washington shipped large amounts of naphtha to Venezuela.

Estimates for how much crude is needed from OPEC were lowered by 300,000 bpd from last month's assessment amid surging supplies from its rivals, driven by the USA shale boom.

Oil prices rose 2 percent on Wednesday after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production, but swelling US crude inventories led the market to pare gains. Venezuela's output is already at the lowest in decades as a spiraling economic crisis takes its toll on oil infrastructure.

John Kemp is a Reuters market analyst.

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