Oil steadies as investors weigh up odds of global supply squeeze

US oil prices edge up as market eyes tighter supply

Venezuelan opposition readies U.S. fund to receive oil revenue

Concern about potentially slowing demand for crude oil has contributed to price reductions.

Oil tanker is seen at sunset anchored off the Fos-Lavera oil hub near Marseille, France, October 5, 2017. USA crude was down 48 cents at $53.18. The market also contended with the possibility that oil producers would not adhere strictly to cuts agreed to previous year. WTI settled 2.73 percent higher in the last session at its highest close since November 19.

USA crude futures fell $1.37 a barrel, or 2.5 percent, to settle at $52.64. "There seems to be uncertainty about what is going to happen with the trade talks, with global economic growth and demand in the coming year", he said.

"The fact that US crude oil and gasoline stocks rose more sharply than expected, as reported by the API after the close of trading yesterday, is weighing on prices", said Carsten Fritsch, an analyst at Commerzbank.

"Supply fundamentals have increasingly been turning supportive in recent weeks, but against this the market still worries about the yet-to-be-realized - if at all - impact on demand from weaker macroeconomic fundamentals".

Citgo, the eighth-largest USA refiner and Venezuela's top foreign asset, is in the middle of a tug of war as the Trump administration has made aggressive moves to remove it from Maduro's control.

The report revealed that there have been encouraging signs in trade talks between the United States and China over tariffs recently, and any agreement between the two countries could provide upside to oil demand, and indeed oil prices, going forward.

However, U.S. crude stocks rose last week even as refineries boosted output, while gasoline and distillate stocks increased, data from industry group the American Petroleum Institute showed on Tuesday.

Oil prices fell on Thursday after US crude inventories rose and the country's production held at record levels, but OPEC-led supply cuts and Washington's sanctions against Venezuela supported markets. Oil prices fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

Market participants have already been focused on signs of tightening global crude supply after the Organization of the Petroleum Exporting Countries (OPEC) and allies began an agreement in January to cut output.

However, while OPEC is cutting output, the United States has expanded supply, with production most recently totaling 11.9 million bpd.

"The global oil supply/demand balance could shift from a current significant surplus to zero at the end of the year", Jean-Pierre Durante, an analyst at Pictet Wealth Management, wrote in a report, if producers comply with the decision and extend it until December.

Latest News