- Oil set for its best quarter since 2009 as OPEC+ production cuts and trade talks boost sentiment.
- US sanctions against Venezuela and Iran have helped WTI futures amid an improved outlook for supply.
- A tweet from President Trump spiked prices last week but they have since recovered for a potential 31% Q1 gain.
Global oil markets are set to post their best returns in a decade after OPEC led cuts and continued sanctions boost prices.
Expectations that a trade deal between the US and China have also aided prices, with WTI futures set to rise for a fourth consecutive week, according to Reuters. Similarly, US sanctions on Iran and Venezuela have cut their supply from global markets aiding prices.
Prices are set to come under pressure later this year. Saudi Arabia is keen to continue current production cuts whereas non-OPEC member Russia would prefer an earlier cut off date. A June meeting will be key in deciding the future of production cuts which have taken some 1.2 million barrels per day out of the market since late last year.
“Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!” Trump wrote in a post on Twitter.
Trump’s tweet sent prices tumbling around 2% yesterday and belies a wider concern about prices in the second half of the year.
“Trump meddling with the price of oil is nothing new, but still has an impact,” according to Jasper Lawler, head of research at London Capital Group. Brent crude is also set to post a 27% return for the first quarter, per Reuters.
“This and the weaker global growth hitting demand are the big risks which oil prices face in the second half of the year,” Lawler said.
Brent crude is up 0.5% at $67.4 a barrel while WTI is close to the $60 mark at $59.7 trading up 0.8% as of 8.55 a.m in London.