But one analyst predicts calamity if Libyan exports dry up: File Image/Pixabay
Images of armoured vehicles in Venezuela mowing down protestors who seek to end the presidency of Nicolas Maduro momentarily caused Brent on Tuesday to rise above $73 per barrel, but the price retreated when it became apparent that the rebellion in the Bolivian republic - for the time being at least - was a bust.
Venezuela's woes, combined with U.S. crude production falling in February, resulted in another day of gains for Brent, which settled 76 cents higher at $72.80 per barrel, and for West Texas Intermediate, which rose 41 cents to $63.91 per barrel.
However, it's almost a foregone conclusion that the Venezuelan conflicts will intensify in coming days and weeks, thus affecting prices; as for the effect of the Energy Information Administration reporting that American output fell to 11.68 million barrels per day (bpd) in February (down from 11.87 million (bpd) January), that too may be offset in coming days if the American Petroleum Institute's forthcoming numbers match a Reuters poll showing that U.S. crude stockpiles were expected to have risen last week.
Jeff Currie, Goldman Sachs
We now know that OPEC has that spare capacity: they ramped it up, they took it back down
One factor that continues to lend support to prices is the on-going optimism expressed by the Organization of the Petroleum Exporting Countries (OPEC) that it is well within its reach to keep the crude market balanced via its output cuts, and this notion was reinforced on Tuesday with Khalid al-Falih, energy minister for Saudi Arabia, stating that the cutback deal could be extended to the end of this year.
OPEC's unlikely role as a market stabilizer and analytical pacifier was given further credence by Jeff Currie, head of commodities research for Goldman Sachs: on Tuesday he told CNBC television, in reaction to fears of crude supplies tightening due to export losses from Venezuela and Iran, that "We now know that OPEC has that spare capacity.
"They ramped it up, they took it back down, and we think the [Iran] shock is roughly 900,000 bpd, and we just saw OPEC, at least core OPEC, taking 1.8 million bpd off the market."
Of course not all analysts are as confident about the market's prospects in the near future: Neil Beveridge, senior oil and gas analyst at Bernstein, worried that "If we lost Libya from the market, it would take spare capacity down to very uncomfortable levels and would certainly add a major risk premium to oil."
Another source of discontent for analysts is instability in Algeria, Nigeria, and Sudan.
Meanwhile, Bob Dudley, chief executive officer at BP, told Bloomberg television that oil prices of late have been "extremely volatile," and he predicted that all factors considered, oil will be "in the fairway of $60-$75" per barrel for 2019.