USA oil prices dip on rising crude inventories, record output

USA oil prices dip on rising crude inventories, record output

USA oil prices dip on rising crude inventories, record output

The Organisation of the Petroleum Exporting Countries, Russia and other non-OPEC producers - an alliance known as OPEC+ - agreed in December to reduce supply by 1.2 million bpd from January 1. "Because the number was a little disappointing, it played into the slowing demand scenario", said Phil Flynn, oil analyst at Price Futures Group in Chicago. -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.

Meanwhile, US sanctions against Venezuela's oil industry are expected to freeze sales proceeds of Venezuelan crude exports to the United States. "That said, if the other OPEC countries fail to offset this outage, the oil market could quickly become undersupplied, driving the price up".

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.

Brent crude oil futures were last down $0.12 at $62.57 a barrel by 1022 GMT, while USA crude futures were down $0.07 at $53.94 a barrel. The global benchmark crude was at an $8.36 premium to WTI for the same month.

"The large draws in distillate ... made sure that commercial oil inventories fell for the second week, this time by 3.4 million barrels", he said.

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Crude inventories rose by 2.5 million barrels in the week ended February 1 to 448.2 million, compared with analysts' expectations for an increase of 2.2 million barrels.

The price of United States crude continues to rise and the outlook is still constructive on tight supplies and concerns about Venezuelan output.

According to a separate report by FXDailyReport analyst Katrina Ang, analysts expectations were for an inventory expansion of up to 2.2 million barrels. WTI settled 2.73 percent higher in the last session at its highest close since November 19. The surge comes shortly after Washington slapped sanctions on the Venezuelan state oil company PDVSA.

The move ratcheted up pressure on Maduro to cede power to National Assembly leader Juan Guaido, who the US and European allies have recognized as Venezuela's rightful president.

US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached. "Around a third of Venezuela's exports head to the USA, as such, we expect Venezuelan exports to quickly fall by 300,000 barrels per day (bpd) to around 700,000 bpd", ANZ bank said on Thursday.

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