US oil settles 0.6% higher at $58.61 a barrel, hits 4-month high

Brent and West Texas Intermediate crude oil futures reached four-months highs on Thursday, as a production curb agreement by OPEC and its partners along with U.S. sanctions on Iran and Venezuela tightened global supplies.

An unexpected dip in U.S. crude oil inventories and production also supported prices, traders said.

hit a 2019-peak of $68.14 per barrel on Thursday before easing to $67.19.

were at $58.56 per barrel, up 30 cents, or 0.51 percent, from their last settlement.

“With OPEC‘s cuts in full-swing … persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported,” said Jasper Lawler, head of research at futures brokerage London Capital Group.

The Organization of the Petroleum Exporting Countries (OPEC) and some non-aligned producers including Russia have been withholding oil supply since the start of the year to tighten global markets and prop up crude prices.

In Venezuela, oil production and exports have been disrupted by a political and economic crisis that has caused massive blackouts and supply shortages, while Washington has barred U.S. companies from doing business with the Venezuelan government, including state-owned oil firm PDVSA.

Adding to the turmoil, two storage tanks exploded at a heavy-crude upgrading project in eastern Venezuela on Wednesday, according to an oil industry source and a legislator.

In the Middle East, the United States aims to cut Iran‘s crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid U.S. sanctions, two sources familiar with the matter told Reuters.

Meanwhile, a weekly report by the U.S. Energy Information Administration (EIA) said U.S. commercial crude oil inventories fell last week as refineries hiked output.

U.S. crude oil production also dipped, falling by 100,000 barrels per day (bpd) to 12 million bpd.

In China, official statistics showed refinery crude oil use hit a record.

Still, oil prices could also come under downward pressure from an economic slowdown.

Growth in China‘s industrial output fell to a 17-year low of 5.3 percent in the first two months of the year, official data showed on Thursday, pointing to further weakness in the world‘s second-biggest economy and top crude importer.