US oil prices dip on rising crude inventories, record output

US oil prices dip on rising crude inventories, record output

US oil prices dip on rising crude inventories, record output

The oil price also came under pressure as weekly data published by the U.S. Energy Information Administration on Wednesday showed an unwelcome increase in stocks of crude oil. Elsewhere, supplies from OPEC face heightened uncertainty after Libya's eastern leader Khalifa Haftar said his forces have taken control of the country's largest oil field.

Meanwhile, US sanctions against Venezuela's oil industry are expected to freeze sales proceeds of Venezuelan crude exports to the United States. Still, "more hard work is needed to turn this market unreservedly bullish".

An oil pumpjack and a tank with the corporate logo of state oil company PDVSA are seen in an oil facility in Lagunillas, Venezuela January 29, 2019.

Prices have been buoyed by a new round of supply cuts from the Organization of the Petroleum Exporting Countries and its allies that began in January.

"The price has yet to react in any noticeable way", he said.

WTI prices were $46.54 per barrel at the start of the year, rising to current levels in part on geopolitical concerns about Venezuela, as well as on the possibility of an economic slowdown in China. The contract increased 35 cents to $54.01 on Wednesday.

At 11:00 GMT, March WTI crude oil is trading $53.69, down $0.32 or -0.57% and April Brent crude oil is at $62.44, down $0.25 or -0.40%.

Crude oil prices hit a 2019 high on Monday.

Some analysts, however, were relieved that US 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.

Distillate fuel inventories last week shed 2.3 million barrels and production averaged 5.1 million barrels per day.

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. They closed down 1.3 percent on Monday, after earlier touching their highest since November 21 at $55.75 a barrel.

In his State of the Union address, U.S. President Donald Trump said a trade deal was possible with China.

Saudi Arabia, the world's top oil exporter, cut its crude output in January by about 400,000 barrels per day (bpd), two OPEC sources said, as the kingdom follows through on its pledge to reduce production to prevent a supply glut.

Market participants are also watching for developments surrounding the U.S. "Around a third of Venezuela's exports head to the U.S., 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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