Oil prices lower as inventory build only modest

Oil prices lower as inventory build only modest

Analysts said that us sanctions on Venezuela had focused market attention on tighter global supplies.

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.

A day after the American Petroleum Institute disappointed oil bulls by reporting an estimated inventory build across the board, the Energy Information Administration deepened the mood by saying US crude oil inventories added 1.3 million barrels in the week to February 1.

Futures on United States and global benchmarks, West Texas Intermediate (WTI) and Brent crude, rose to the highest level since late November 2018.

"We've been turning the heat up on the regime", Mnuchin said Wednesday, touting the effectiveness of fresh sanctions that President Donald Trump's administration imposed January 28.

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

At 447.2 million barrels, the EIA said, US crude oil inventories are still above the seasonal average but not by much.

The West Texas Intermediate for March delivery added 0.35 USA dollar to settle at 54.01 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April increased 0.71 dollar to close at 62.69 dollars a barrel on the London ICE Futures Exchange. That's down from 10.643 million bpd in December, representing a cut that was 70,000 bpd deeper than targeted under the OPEC-led pact to balance the market and support prices. Venezuela, an OPEC member, is like Iran and Libya exempt from making voluntary curbs under the deal.

Crude is unwinding yesterday's rally, as economic concerns rise up once more and a stronger dollar provides headwinds, Matt Smith, director of commodity research at ClipperData, told UPI.

Oil steadied on Thursday as growing expectations that global supply could fall significantly short of demand this year lent support, offsetting the negative impact of a rise in United States inventories.

In addition to the above observations, the report included a discussion on US-China trade tensions and Russian and US crude oil production forecasts. Oil fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

The producers known as OPEC+ began cutting production by 1.2 million barrels per day from last month to avert a new supply glut and OPEC has delivered nearly three-quarters of its pledged cutback already, according to a Reuters survey.

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. Senior U.S. and Chinese officials are poised to start another round of trade talks next week.

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