Oil falls below $62 on US inventories, fading Venezuela concerns

Oil Slides on Disappointing U.S. Data After Hitting Two-Month High

US oil prices edge up as market eyes tighter supply

Countering the rising USA crude output and inventories are voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at tightening the market and propping up prices.

"The price has yet to react in any noticeable way", Fritsch said of the sanctions. -China trade deal. An economic slowdown in the Euro Zone is now a concerns after German industrial output unexpectedly fell in December for the fourth consecutive month.

A flotilla loaded with Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest USA sanctions on Venezuela and others whose buyers are weighing who to pay.

A report published by the US Energy Information Administration (EIA) last week showed that the country's oil production averaged a record 11.9 million barrels a day in November, up 345,000 from October and up almost 1.8 million compared with November 2017's average figures. "Moreover, lower oil prices - prices were between 14% and 18% lower in January than their 2018 average - are likely to stimulate economic activity and oil demand, particularly in emerging markets", said Jean-Pierre Durante, Head of Applied Research at Pictet Wealth Management.

US West Texas Intermediate (WTI) crude futures gained 43 cents, or 0.8 percent, to $54.09 a barrel after posting a session low of $52.86 a barrel.

At 447.2 million barrels, USA crude oil inventories are about 6 percent above the five-year average for this time of year, the administration said.

CENTCOM chief says Trump did not consult him on Syria withdrawal declaration
"The concern is if we move our forces out of Syria that that may take some pressure off of the ISIS forces in Syria", Hecker said .

Some analysts, however, were relieved that USA crude oil inventories rose by only 1.3 million barrels in the week to February 1, against expectations for an increase of 2.2 million barrels.

About a dozen tankers carrying over 7 million barrels of Venezuelan crude and products were anchored this week at the U.S Gulf Coast waiting for directions on how to pay for the cargoes following the sanctions, according to Refinitiv Eikon data.

While WTI crude future prices rose 0.7 percent on Wednesday, crude oil prices are down from $55.26 per barrel on Friday, its highest level for the year. Distillate stockpiles alone fell by 2.26 million barrels, compared with a decline of 2 million barrels forecast in a Bloomberg survey. They closed down 1.3 percent on Monday, after earlier touching their highest since November 21 at $55.75 a barrel.

The European Union is considering imposing more sanctions on the government of Venezuelan President Nicolas Maduro but has not discussed an oil embargo, Malta's foreign minister said on Monday.

Market participants are also watching for developments surrounding the U.S.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will lead a delegation to Beijing next week to lay the groundwork for a meeting between Presidents Donald Trump and Xi Jinping later this month.

Latest News