Mubasher: Oil prices stabilised on Friday, as supply cuts led by the Organization of Petroleum Exporting Countries (OPEC) offered support, US sanctions against Venezuela and Iran slightly tightened global supply in the first quarter of this year.

On the other hand, a rally in prices was capped by worries that an economic slowdown would soon start restraining growth in oil demand.

By 8:20 am GMT, US Nymex crude futures went up 0.41% to $58.85 per barrel (pb), while international Brent futures rose 0.42% to $67.51 pb.

Since the beginning of the year, crude oil rallied about a quarter.

A group of OPEC members and allied producers like Russia, also known as OPEC+ alliance, have been withholding around 1.2 million barrels per day (bpd) in supply from the start of the year to tighten markets and shore up prices.

“Oil continues to grind higher [...] in response to ongoing production cuts from the OPEC+ group of producers as well as another [output] slump from a blacked-out Venezuela,” Denmark’s Saxo Bank commodity strategy head Ole Hansen.

In addition, US sanctions prevented Iranian and Venezuelan oil from reaching markets, Refinitiv’s global crude flow data showed a meagre supply deficit likely appeared in the first quarter.

However, an economic slowdown that had been manifested in large parts of Asia and Europe, which is showing signs of spilling into North America, would soon curtail crude demand growth.

Given that, oil demand has held up well until now. In China, the world’s biggest consumer, crude consumption in the first two months of this year rose 6.1% year-on-year earlier to a record 12.68 million bpd, official data showed this week.