United States oil prices edge up as market eyes tighter supply

Vladimir Putin and Nicolas Maduro

Vladimir Putin and Nicolas Maduro

USA crude inventories rose by 2.5 million barrels last week, the American Petroleum Institute said on Tuesday.

In an interview aired by private broadcaster Televen, Manuel Quevedo, also president of the oil company, commented on US sanctions imposed last week on PDVSA and its USA subsidiary Citgo.

Opec's sales to the world's biggest economy fell 22 per cent month-on-month and 37 per cent year on year, to 1.4m barrels per day, data from energy intelligence company Kpler shows.

"The fact that US crude oil and gasoline stocks rose more sharply than expected, as reported by the API after the close of trading yesterday, is weighing on prices", said Commerzbank analyst Carsten Fritsch.

Oil fell below $62 a barrel on Wednesday after a report showed a rise in USA crude inventories, countering expectations of a tightening market in 2019 because of OPEC-led supply cuts and us sanctions on Venezuela. The government's official supply report is due later on Wednesday.

Brent crude futures were down 46 cents, or 0.7 percent, at $62.05 a barrel, off a high of $63.63. US crude was down 48 cents at $53.18. Short-term, speculative buying interest is being driven by the US sanctions on Venezuela.

While OPEC and allied producers are slashing their output in an attempt to boost crude prices, which saw a rapid fall past year, the USA has been opposing the measure and vowed to continue expanding its supply.

Morse predicted that moving forward "We have plenty of potentially bullish moves in the market" following a period of soft demand before the seasonal fuel consumption rise begins around May, with Brent rising into the mid-$60 range and hitting $70 before year end - which the researcher believes will encourage USA producers to allocate more money to drilling.

Meanwhile, oil supply from the OPEC fell in January by the largest amount in two years, a Reuters survey found.

Venezuela, like fellow OPEC members Iran and Libya, was exempt from production curbs under the OPEC+ deal on expectations that its output faced involuntary downward pressure in 2019. The oil market has also been aided by a slight pick-up in risk sentiment over the last month as US-China trade tensions are dialled down a touch. US Treasury Secretary Steven Mnuchin told reporters that by blocking PDVSA's assets, the United States was preserving the assets of the company in the interests of the people of Venezuela and also protecting its own market. -China trade dispute. Oil prices fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

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