Oil prices were near their highest level for the year mid-week as Opec-led supply cuts and US sanctions against Iran and Venezuela outweighed the rise in US crude inventories.

Brent crude was trading at $69.96 per barrel mid-week, the highest level since mid-November — the last time prices were near the $70 per barrel mark.

Prices steadily increased since the start of the week, when Brent was trading at $67.92 per barrel, before climbing to around $69.52 per barrel. This time last week, futures were trading at about $67.77 per barrel.

US West Texas Intermediate also saw an increase with crude trading mid-week at $62.59 per barrel, after having briefly hit $62.99 per barrel, the highest since mid-November. WTI was fetching about $59.38 this time last week.

The boost came despite further growth in US commercial crude oil inventories, which increased by 7.2 million barrels in the week ending 29 March compared to the previous week.

At 449.5 million barrels, US oil inventories are at the five-year average for this time of year, according to the US government's Energy Information Administration (EIA).

the EIA's figures also revealed that US crude oil refinery inputs averaged 15.8 million barrels per day during the week ending 29 March, which was 18,000 bpd more than the previous week’s average.

Gasoline production increased last week, averaging 9.8 million bpd, while distillate fuel production decreased last week, averaging 4.9 million bpd, the EIA said.

This week, prices also recovered from lows brought on by a call from US President Donald Trump last week for Opec to boost crude output in an effort to lower prices.

Futures were hit immediately following Trump’s comments, but subsequently rallied above pre-tweet levels.

For much of the year, futures have been supported by Opec efforts, and allies such as Russia, who have pledged to withhold around 1.2 million bpd of supply this year.

Saudi Arabia-led Opec and Russia, so called Opec+, are due to meet in June to discuss whether to continue withholding supply or not.

Saudi Arabia reportedly favours cuts for the full year, but Russia is seen to be less keen to keep holding back supply beyond this coming September.

Russia has yet to reach its production-cutting target but had brought output down to 11.3 million bpd last month, according to energy ministry data.

However, the Opec+ cuts are not the only factors behind rising prices this year, with US sanctions on oil exporters from Opec members Iran and Venezuela as additional reasons for the surge, as well as unresolved US-China trade disputes.

A US official said earlier in the week that three of eight countries granted waivers by Washington to import oil from Iran had cut such purchases to zero, adding to concerns that supply may tighten.

Also, output from Venezuela has been halted amid sanctions on state-owned PDVSA, introduced by Trump in an effort to cut off revenues for Venezuela’s President Nicolas Maduro.

Political uncertainty in Venezuela has sunk the country into darknesss with citizens left to deal with power blackouts and a shattered economy, plus a shortage of food and medicine.

In addition, the political crisis was escalated by the arrival of two Russian air force planes last week, which prompted Trump to call on Russia to get its troops out of Venezuela.

Russia and China have backed President Nicolas Maduro, while the US and most other Western countries support opposition leader Juan Guaido.

Weekly

Crude price close to year-high