Oil Rises To March High On Middle East Tensions, Venezuela Concerns

Global Oil Demand To Rise In The Year – IEA

Stocks in February were 44 million barrels above that level, OPEC said, the closest the group has come to the target.

Analysts also pointed to the nomination of Mike Pompeo as new U.S. Secretary of State as a risk to oil markets, given that he fiercely opposed the Iranian nuclear deal as a member of Congress.

Oil hit a six-week high on Wednesday, closing in on a 3-year peak set in late January, on a surprise decline in USA inventories, strong compliance on OPEC production cuts, and persistent concern related to the Iran nuclear deal.

Falls on global share markets helped cap gains.

Saudi Arabia is threatening an arms race with Iran.

He pointed out in a note that "Spot Brent crude oil prices averaged $3.36 per barrel more than WTI prices in 2017 compared with just $0.40 per barrel more in 2016, providing a price incentive to export USA crude oil into the global market" - a scenario he says will cause headaches for the Organization of the Petroleum Exporting Countries (OPEC), Russia, and their allies as they struggle to make headway in year two of their production cutback deal. But with the hardening stance of the United States towards Iran, most investors were reluctant to sell oil aggressively.

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Compliance with a global deal to cut oil supply hit a new high in February, a joint OPEC and non-OPEC committee estimated, suggesting a rise in the price of crude has not weakened commitment.

PVM's Varga said Venezuela was a potential source of supply disruption, but he said the bigger challenge for OPEC and its allies was ensuring their efforts to balance the market through output curbs was not undermined by rising production elsewhere.

The report further explained that Canada is the leading destination of American crude, adding that the U.S. has also been exporting more to Asia, which for long has been a major market for the Organisation of Petroleum Exporting Countries (OPEC), and Russian Federation.

Data released by the U.S. Energy Information Administration (EIA) on Wednesday morning showed a surprise 2.6 million barrel draw in crude inventories.

Bearish concerns have largely been fueld by surging USA crude output.

"On the back end of the Fed meeting, the dollar is getting under pressure, and that is going to work as a reverse correlation to crude oil prices", said Bob Yawger, director of energy futures at Mizuho in NY.

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