Published: Thu, February 07, 2019
Markets | By Otis Pena

Oil slips on API report of US inventory rise

Oil slips on API report of US inventory rise

The government's official supply report is due later on Wednesday.

Meanwhile, the national price for regular gas on Wednesday averaged about 2.28 USA dollars per gallon (about 3.8 liters), compared with 2.26 dollars per gallon a week ago, 2.24 dollars per gallon a month ago and 2.60 dollars per gallon a year ago, according to data of the American Automobile Association (AAA), which is a privately held non-profit national member association and service organization in the United States and Canada. Still, "more hard work is needed to turn this market unreservedly bullish".

Providing global markets with price support are supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at tightening the market. -China meetings next week ahead of a March 1 deadline for trade tariffs to rise.

US crude was up 42 cents at $54.08 a barrel, while Brent crude was up 63 cents at $62.61 a barrel by 11:25 a.m. EDT [1525 GMT]. The contract increased 35 cents to $54.01 on Wednesday.

According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 1.3 million barrels from the previous week.

Crude futures earlier posted around two-month highs.

The Energy Information Administration reported Wednesday that domestic crude supplies rose by 1.3 million barrels for the week ended February 1. Distillate stockpiles alone fell by 2.26 million barrels, compared with a decline of 2 million barrels forecast in a Bloomberg survey.

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In the previous week ending January 25, EIA reported a build of 900,000 barrels of US crude oil inventories.

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.

At the same time, Venezuela's exports to the US dropped by almost 30%.

Traders are watching how long a partial closure of the Keystone oil pipeline would last after the discovery of a possible leak in the area of St. Louis Missouri.

Traders are still anxious about the global economic slowdown especially because of the uncertainty surrounding the U.S.

More stringent sanctions on Venezuela that bar companies that do business with PDVSA from accessing the USA financial system resemble Washington's measures on Iran, ANZ Banking Group said.

"Around a third of Venezuela's exports head to the United States 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.

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