Mubasher: Oil prices edged up on Wednesday on tightening market supply thanks to supply curbs led by the Organization of the Petroleum Exporting Countries (OPEC) and US sanctions against Iran and Venezuela, according to Reuters.

However, expectations that an economic slowdown could soon dampen crude consumption kept a lid on gains.

By 7:58 am GMT, US Nymex crude futures rose 0.45% to $64.27 per barrel (pb), while global benchmark Brent futures went up 0.37% to $70.87 pb. Both contracts surged to five-month peak in the previous session.

Known as OPEC+, an alliance of the producer club members and other major producers, including Russia, agreed late last year to withhold around 1.2 million barrels per day (bpd) starting last January.

“The global oil market is clearly moving back towards balance thanks to OPEC+ production cuts,” ING bank was quoted by Reuters, noting that “OPEC production has fallen 1.98 million barrels per day (bpd) from October levels.”

Moreover, the short supply came also as a result of Washington’s sanctions against oil-rich Iran and Venezuela, according to the news agency.

“Venezuelan oil output is estimated to have fallen from 1.19 million bpd in October to 890,000 bpd in March, while output from Iran has fallen from 3.33 million bpd to 2.71 million bpd due to sanctions,” the Dutch bank said.

That said, worries mounted over a potential slowdown of the global economy which is set to dent fuel demand.

On Tuesday, the International Monetary Fund (IMF) warned that the world’s economy was slowing more than expected and a sharp slowdown is incoming.

The IMF downgraded its growth outlook for this year to 3.3%, for the third time in six months.

On the supply front, oil production in the US climbed by more than 2 million bpd since early last year, hitting a record 12.2 million bpd.