Oil prices rise, adding to biggest quarterly gain in 10 years

United States sanctions on Iran and Venezuela have resulted in the rise of oil prices. (Bloomberg pic)

TOKYO: Oil prices rose on Monday, adding to gains in the first quarter when the major benchmarks posted their biggest increases in nearly a decade, as concerns about supplies outweigh fears of a slowing global economy.

Brent crude for June delivery was up by 34 cents, or 0.5%, at US$67.92 a barrel by 12am, having risen 27% in the first quarter.

US West Texas Intermediate (WTI) futures rose 30 cents, or 0.5%, to US$60.44 barrel, after posting a rise of 32% in the January-March period.

US sanctions on Iran and Venezuela along with supply cuts by members of the Organisation of the Petroleum Exporting Countries (OPEC) and other major producers have helped support prices this year, overshadowing concerns about global growth and the US-China trade war.

Sigal Mandelker, US under-secretary of the Treasury for Terrorism and Financial Intelligence, told reporters in Singapore on Friday that the United States had placed further “intense pressure” on Iran.

US officials are keen to ensure see that Malaysia, Singapore and others are fully aware of illicit Iranian oil shipments and the tactics Iran uses to evade sanctions, Mandelker said.

The US has also instructed oil trading houses and refiners to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published US sanctions, three sources familiar with the matter said.

A deal between OPEC and allies such as Russia to cut output by around 1.2 million barrels per day, which officially started in January, has also supported prices.

US production has also steadied since mid-February. The US government reported on Friday that domestic output in the world’s top crude producer edged lower in January to 11.9 million bpd.

US energy firms last week reduced the number of oil rigs operating to the lowest level in nearly a year, cutting the most rigs in a quarter in three years, Baker Hughes energy services firm said.

Hedge funds and other money managers raised their net long US. crude futures and options positions to 243,209 in the week to March 26, the US Commodity Futures Trading Commission (CFTC) said.