Oil prices edge higher amid concerns over global economy

Oil prices edge higher amid concerns over global economy

US crude inventories rose by 2.5 million barrels last week and gasoline stocks also increased, the American Petroleum Institute said.

In an interview with Sputnik, Venezuela's National Representative to OPEC, the technical adviser at Venezuela's PDVSA company and Petroleum Ministry Ronny Romero spoke about the impact of the USA sanctions on the oil and gas giant.

The recent downswings in the crude oil market have been highly correlated with the release of the bearish economic data.

However, Venezuela's woes assuaged traders' mounting fears to a degree, with the US sanctions limiting oil transactions between the Bolivian republic and other countries, and the European Union considering imposing more sanctions on the government of president Nicolas Maduro.


Venezuela's state oil firm PDVSA is looking to sell more of its oil to customers in Europe and Asia as the USA sanctions are cutting off US buyers of its crude, a senior Venezuelan oil official loyal to Nicolas Maduro told Russian news outlet Sputnik in an interview published on Wednesday. The government's official supply report is due later on Wednesday.

U.S. West Texas Intermediate (WTI) crude futures were at $54.77 per barrel at 0223 GMT, up 21 cents or 0.4 percent.

Meanwhile, a Reuters survey found that supply from OPEC states had fallen the most in two years as Saudi Arabia and its Gulf Arab allies over-delivered on pledged cuts, while Iran, Libya and Venezuela registered involuntary declines.

OPEC and 10 partner producers outside the cartel agreed late previous year to hold back crude output by 1.2 million barrels a day for the first half of 2019, in an effort to soak up a global supply glut and rebalance the market.


"The global oil supply/demand balance could shift from a current significant surplus to zero at the end of the year", Pictet Wealth Management analyst Jean-Pierre Durante wrote in a report.

"Anything out of the State of the Union that hints at the US-China deal not working out, or more anti-trade rhetoric would be a negative for energy prices as demand would be lower if global growth keeps being downgraded", said Alfonso Esparza senior market analyst, OANDA.

The global economic outlook and prospects for growth in fuel demand have also been clouded by poor economic data in China and U.S. -China trade dispute. 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 his Chinese counterpart Xi Jinping in coming weeks to try to settle the two countries' dispute.


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