USA oil prices dip on rising crude inventories, record output

The sanctions will limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran a year ago, some analysts said after examining details announced by the USA government.

U.S. sanctions on Venezuela's state oil company could also lift prices, though they have yet to trigger any sharp increase.

According to EIA, U.S. crude oil refinery inputs averaged 16.6 million barrels per day last week, which was 170,000 barrels more than the previous week's average.

Brent crude futures dropped 24 cents, or 0.38 percent, to settle at $62.51 a barrel.

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

Prices also dipped after data showed US crude inventories at Cushing, Oklahoma, the delivery point for USA crude futures, rose by more than 943,000 barrels in the week to February 1, traders said, citing data from market intelligence firm Genscape.

U.S. West Texas Intermediate (WTI) crude was down 13 cents at $53.53. "That said, if the other OPEC countries fail to offset this outage, the oil market could quickly become undersupplied, driving the price up".

USA inventories of winter fuels, including propane, shrank by about 4.9 million barrels combined last week, EIA data showed Wednesday. OPEC and associated partners agreed to cut 1.2 million barrels per day with OPEC being responsible for 800,000 barrels.

The Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, agreed to production cuts effective from last month to beat back supply growth. Venezuela, an OPEC member, is like Iran and Libya exempt from making voluntary curbs under the deal.

Meanwhile, hopes for thawing China-US relations have also helped ease concerns over slowing economic growth. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. The global benchmark crude was at an $8.36 premium to WTI for the same month.

-China trade war, which has dragged on world markets as investors worry that the dispute could contribute to a potential global economic slowdown. Oil prices fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.

Trump has vowed to increase US tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent now if the two sides can not reach a deal by March 1.

  • Wendy Palmer