Oil prices rose on Tuesday as investors expect U.S. sanctions on Venezuela and production cuts led by OPEC and its allies to head off any glut, but data showing a decline in U.S. factory orders weighed on the market.
The supply optimism helped U.S. West Texas Intermediate (WTI) and Brent crude reach 2019 highs on Monday.
WTI futures were up 46 cents, or 0.84 percent, at $55.02 per barrel by 0940 GMT. They touched their highest level in more than two months at $55.75 the previous day.
International Brent crude futures were up 33 cents, or 0.53 percent, at $62.84 a barrel, down from a high of $63.63.
Trading proceeded at lower volumes in parts of East Asia due to the Lunar New Year holiday.
It would be recalled that the Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to production cuts effective this month to forestall an overhang.
The oil industry generally believes the curbs will help balance the market in 2019.
You’ll see OPEC disciplined and therefore prices look fairly robust around where they are, BP CFO Brian Gilvary told Reuters, adding that he expected demand growth of 1.3 to 1.4 million bpd in 2019 � similar to 2018.
Analysts said U.S. sanctions on Venezuela had focused market attention on tighter global supplies.
Fresh U.S. sanctions on the country could see 0.5-1 percent of global supply curtailed, said Vivek Dhar, mining and energy analyst at Commonwealth Bank of Australia.
Source: Voice of Nigeria