Oil prices rise amid supply cuts, economic slowdown looms

Oil prices firmed on Tuesday, pushed up by ongoing supply cuts led by producer club OPEC and by U.S. sanctions on Iran and Venezuela, but analysts warned that signs of a sharp economic slowdown could soon drag on crude markets.

Brent crude oil futures were at $67.46 per barrel at 0110 GMT, up 25 cents, or 0.4 percent, from their last close. Image source: Reuters

Oil prices firmed on Tuesday, pushed up by ongoing supply cuts led by producer club OPEC and by U.S. sanctions on Iran and Venezuela, but analysts warned that signs of a sharp economic slowdown could soon drag on crude markets. Brent crude oil futures were at $67.46 per barrel at 0110 GMT, up 25 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) futures were at $59.31 per barrel, up 49 cents, or 0.8 percent, from their last settlement. Oil prices have been supported for much of 2019 by efforts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, who have pledged to withhold around 1.2 million barrels per day (bpd) of supply this year to prop up markets.

Prices have also been driven up by U.S. sanctions on oil exporters and OPEC-members Iran and Venezuela. Yet analysts said oil prices would likely be higher by now if it wasn`t for a spreading economic slowdown that is expected to start denting fuel consumption.

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"Crude prices can`t shake off global growth concerns," said Edward Moya, senior analyst at futures brokerage OANDA. Manufacturing data from Asia, Europe and North America is pointing to a sharp economic slowdown. "Global factory output growth slowed to a 1 percent rate last quarter, and indicators point to a near stall this quarter," said JPMorgan Chase Bank.

"Outside China, Asian industry was already contracting as we turned into the New Year," the U.S. bank added.

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Brent Crude OPEC