USA oil, gasoline inventories up in latest week

Roman Schwartz
February 7, 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.

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 US inventories.

"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.

Daniel Yergin, vice chairman of IHS Markit, agreed: "I think the oil price is moved by what happens with the overall financial markets; it means sentiment will have a bigger impact on the oil price, [and] a big surge in USA oil production becomes bearish for the global market so you get more and more complicated feedback loops".

The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran previous year, experts said after examining details posted by the Treasury Department.

"All in all this report is bullish for crude oil and refined product prices".

At 447.2 million barrels, USA crude oil inventories were about 6 percent above the five-year average for this time of year.

Al-Shabab Claims Responsibility for Deadly Car Bomb Blast In Somalia's Capital
But it retains control of large rural swathes of the country and continues to wage a guerrilla war against the authorities. Formosa was manager at Bossasso for P&O Ports, a subsidiary of the Dubai-based DP World, according to LinkedIn.

International Brent crude oil futures fell 25 cents, or 0.4 per cent, to $62.44 per barrel. These factors have helped lift the price from a low of $42.95 in late December to its current level around $55.30 per barrel - not far from the 2-1/2 month high reached Monday.

Meanwhile, U.S. sanctions against Venezuela's oil industry are expected to knock out at least 500,000 bpd of crude exports.

Russia has been in full compliance with its pledge to gradually cut its oil production, Russian Energy Minister Alexander Novak said in a statement on Monday, adding that production decreased by 47,000 barrels per day (bpd) in January from October.

"You have the sanctions on Venezuela, on top of the reduced supply from Saudi Arabia", Olivier Jakob, oil analyst at Petromatrix, said as cited by Reuters. "There's no sign of overhang in the crude oil markets".

"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. 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.

United States energy firms last week cut the number of oil rigs operating to their lowest in eight months as some drillers followed through on plans to spend less on new wells this year.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER