Oil ticks higher, market eyes US State of the Union address

08 February, 2019, 00:22 | Author: Frank Williams
  • US oil prices edge up as market eyes tighter supply

Countering the rising USA crude output and inventories are voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at tightening the market and propping up prices.

Moreover, Venezuela is struggling to export oil because of USA sanctions in support of "interim president" Juan Guaidó, who is challenging the incumbent Hugo Chávez.

Though the United States published robust jobs data last week, global markets remain nervous after China reported the lowest annual economic growth in almost 30 years in January.

The impact of OPEC+'s supply curbs has been boosted by USA sanctions on Venezuelan state-owned oil firm PDVSA.

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. The contract increased 35 cents to $54.01 on Wednesday.

The daily trend is up for both WTI and Brent crude oil, however, momentum is starting to shift to the downside.

USA inventories of winter fuels, including propane, shrank by about 4.9 million barrels combined last week, EIA data showed Wednesday.

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According to a separate report by FXDailyReport analyst Katrina Ang, analysts expectations were for an inventory expansion of up to 2.2 million barrels. Meanwhile US WTI crude rose to $55.53. They closed down 1.7 percent on Tuesday.

Brent crude oil futures were last down 50 cents, or 0.8, at $62.19 a barrel by 1310 GMT.

The fund would receive income accrued by state-run oil firm PDVSA's U.S. unit Citgo Petroleum Corp since last month, when U.S. President Donald Trump recognized opposition leader Juan Guaido as Venezuela's legitimate head of state, Carlos Paparoni said in an interview.

OPEC and its allies will probably extend their oil-cuts agreement later this year to keep prices at "comfortable" levels, according to Azerbaijan's energy minister.

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

TransCanada Corp.'s Keystone pipeline and Enbridge Inc.'s Platte pipeline were shut Wednesday to investigate a possible oil spill in Missouri. The surge comes shortly after Washington slapped sanctions on the Venezuelan state oil company PDVSA.

Market participants are also watching for developments surrounding the U.S.

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