Published: Thu, February 07, 2019
Business | By Eloise Houston

Oil rises 1% on signs of tightening global oil supply

Oil rises 1% on signs of tightening global oil supply

In gasoline, the authority reported a build of 500,000 barrels, with daily production at a little less than 9.9 million barrels.

U.S. West Texas Intermediate (WTI) crude futures gained 35 cents, or 0.65 percent, to settle at $54.01 a barrel, up from a session low of $52.86.

Also weighing on crude prices, the American Petroleum Institute said U.S. crude oil supplies rose by more than 2.5M barrels during last week, adding to the previous build.

Citgo, the eighth-largest USA refiner and Venezuela's top foreign asset, is in the middle of a tug of war as the Trump administration has made aggressive moves to remove it from Maduro's control.

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 USA crude oil inventories added 1.3 million barrels in the week to February 1.

USA oil prices declined on Tuesday.

USA sanctions on Venezuela have been viewed as supportive for prices by helping tighten global supplies.

United States oil imports from Opec countries have dropped to five-year lows as the oil producing cartel cuts output, while United States domestic production grows.

Brent crude, the global benchmark, slipped 24 cents to $61.74 a barrel by 1442 GMT. The sanctions will limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran past year, some analysts said after examining details announced by the US government.

However, while OPEC is cutting output, the United States has expanded supply, with production most recently totaling 11.9 million bpd.

With fresh sanctions potentially looming, a flotilla loaded with about 7 million barrels of Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest US sanctions and others whose buyers are weighing who to pay, according to traders, shippers and Refinitiv Eikon data.

When asked about how European and Asian customers could be convinced to buy oil from Venezuela, risking sanctions from Washington, he stated that now, Washington's sanctions apply only to USA entities.

Also dampening market sentiment still were worries about weaker global economic growth and the US-China trade dispute. Oil fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

US President Donald Trump said in his State of the Union address that a trade deal was possible with China.

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

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