Oil prices edged up on Friday, lifted by ongoing supply cuts led by producer club OPEC and by US sanctions on petroleum exporters Iran and Venezuela.

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Despite strong price increases this year, there are concerns that an economic slowdown could soon dent fuel consumption.

International Brent crude oil futures were at $71.03 per barrel at 0653 GMT, up 20 cents, or 0.2 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were at $63.82 per barrel, up 24 cents, or 0.4 percent, from their previous settlement.

"We see Brent and WTI prices averaging $75 per barrel and $67 per barrel respectively through the rest of this year, but risk is asymmetrically skewed to the upside," RBC Capital Markets said in a note.

"Geopolitically infused rallies could shoot prices toward or even past the $80 per barrel mark for intermittent periods this summer," the Canadian bank said.

Oil markets have been pushed up by more than a third this year by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), U.S. sanctions on oil exporters Iran and Venezuela, and an escalating conflict in Libya.

Production in Venezuela has been plunging as the U.S. sanctions add to a deep economic and political crisis, while the U.S. government is expected to tighten oil sanctions against Iran in May.

"Electrical outages added a further hurdle to Venezuelan production, which fell by 290,000 barrels per day in March to 732,000 barrels per day. Iranian production was stable at 2.7 million barrels per day, (but) could take a further hit if the U.S. cuts import waivers in May," said Jefferies bank on Friday.

OPEC and its allies will meet in June to decide whether to continue withholding supply, and while OPEC's de-facto leader, Saudi Arabia, is seen to be keen to continue cutting, sources within the group said it may raise output from July if disruptions elsewhere continue.

On the demand side, most of the world's growth in fuel consumption is coming from Asia.

"China and India comprise nearly 55 percent of global demand growth. Throw in the rest of emerging Asia and the figure balloons to 80 percent," said RBC Capital Markets.

"While macro fears of an economic hard landing may be overblown, the concentration risk of global oil demand remains underappreciated," it said.

China's economic growth is expected to slow to a near 30-year low of 6.2 percent this year, a Reuters poll showed on Friday, as sluggish demand at home and abroad weigh on activity despite a flurry of support measures.

China's automobile sales fell 5.2 percent in March from a year earlier, the country's biggest auto industry association said on Friday, marking the ninth consecutive month of decline in the world's largest auto market.

However, new energy vehicle (NEV) sales, which include electric vehicles, soared by 85.4 percent in March, the CAAM said. NEV sales jumped almost 62 percent last year even as the broader auto market contracted.

First Published:Apr 12, 2019 6:31 AM IST