Oil price gushes 28% as quarter set for 10-year high

Oil headed for its best quarter in almost 10 years as the production cuts by Opec and its allies and the loss of barrels due to US sanctions on Iran and Venezuela countered a wobbly demand outlook.

Futures rose as much as 2.4% after US Federal Reserve Bank of New York president John Williams downplayed the chances of a recession in the world’s largest economy.

The market also shrugged off a complaint by US President Trump that oil prices were “getting too high”, while Russian output dropped further in March.

Oil has clawed back most of its losses from the final quarter of 2018 as Saudi Arabia leads the Organisation of th Petroleum Exporting Countries and its allies in squeezing supplies to prevent a glut.

Whether the US will extend waivers allowing some countries to keep buying Iranian oil is shaping up as a key supply risk, while slowing global economic growth is capping further gains.

The energy complex has put in a stellar price performance in the first three months of this year,” PVM Oil Associates analyst Stephen Brennock wrote in a report.

“The fundamental backdrop is poised to tighten in the coming quarter.”

Brent crude climbed 1.4% to $68.74 a barrel on the London-based ICE Futures Europe exchange. It has risen 28% this quarter.

The comments Mr Williams boosted sentiment as the US and China resumed trade talks.

Bloomberg