London — Oil prices rose on Thursday on the back of ongoing oil cartel Opec-led supply cuts and US sanctions against exporters Venezuela and Iran, but gains were capped by record US crude output, rising inventories and falling estimates of global demand growth.

Brent crude futures were at $66.83 a barrel at 11.43an GMT, up 84c or 1.2%from their last close. US West Texas Intermediate (WTI) crude oil futures were at $56.82 a barrel, up 60c.

Prices were supported by efforts by Opec and allies such as Russia to cut output and tighten oil markets.

“In our view, Opec’s strategy is to rebalance the market as quickly as possible and exit the cuts by the end of June to grow production alongside shale producers in the second half of this year,” US investment bank Goldman Sachs said in a note on Wednesday.

US sanctions against the oil industries of Opec members Iran and Venezuela have also had an impact, traders said. This week, Venezuela’s state-run oil firm PDVSA declared a maritime emergency, citing trouble accessing tankers and personnel to export its oil due to sanctions.

Within the US sanctions against Iran, Washington granted its biggest buyers — mostly in Asia — waivers when the measures were re-introduced in November 2018 that would allow them to buy limited amounts of crude for another 180 days.

Washington has put pressure on these governments to gradually cut their oil imports from Iran to zero, but importers remain in talks over potential extensions, with India asking to be allowed to buy same volumes.

Surging US supply 

Despite these factors, oil remains in plentiful supply thanks to surging US production.

US crude oil stockpiles rose much more than expected last week, with inventories up by 7.1-million barrels to 452.93-million, according to a weekly report by the US Energy Information Administration (EIA) on Wednesday.

US crude oil production was at a record 12.1-million barrels per day (bpd), an increase of more than 2-million bpd since early 2018. That, along with the easing of a transportation bottleneck for low-cost US Permian Basin shale oil, could lead to higher output, Goldman Sachs said.

“Unfortunately for the bull camp, the forward supply of crude oil is showing signs of increasing,” Marex Spectron said in a note.

The Organisation for Economic Co-Operation and Development (OECD) said on Wednesday that the world economy would grow 3.3% in 2019, down 0.2 percentage points from its last set of forecasts in November.