Oil prices up with OPEC cuts, supply risks

Production cuts from the Organization of Petroleum Exporting Countries (OPEC), in addition to supply risks from Iran, Venezuela, and Libya continue to pressure global oil supply and keep oil prices high at Friday's opening.

After closing the previous session at $70.98 a barrel on Thursday, international benchmark Brent crude gained 0.2% to trade at $71.12 per barrel at 0630 GMT.

American benchmark West Texas Intermediate (WTI) was trading at $63.86 per barrel at the same time with a 0.1% gain after ending the previous day at $63.78 a barrel.

The glut of supply in the global oil market is falling after Saudi Arabia-led OPEC and Russia-led non-OPEC agreed on Dec. 7 to trim their total output by 1.2 million barrels per day (bpd) for the first six months of 2019.

The U.S.' sanctions on Iran and Venezuela caused a decline in oil production and exports of these countries. The two major producers are estimated to account for 1.76 million bpd in lost output this year, according to the International Energy Agency's (IEA) Oil 2019 Report released on March 11.

Additionally, supply from Libya is also in decline as tensions continue between UN-backed Government of National Accord and east Libya-based commander Khalifa Haftar who now controls around half of the oil fields in the country that have a total of 1.1 million bpd of oil production.

Due to geopolitical risks and OPEC cuts, Canada-based RBC Capital Markets has raised its oil price forecast for this year by around $6 a barrel.

The global investment bank now expects Brent crude to average $75 per barrel from its previous estimate of $69.50 a barrel. WTI forecast is also revised up to $67 per barrel, from $61.30 a barrel previously.