OIL INVENTORY REPORT – On Tuesday, oil prices trimmed down their gains after global measures of Brent crude strengthened above $73 a barrel. Meanwhile, doubts rose as Venezuelan President Nicolas Maduro wants uprising on possibilities of hitting the country’s crude exports as the market grew less.
As military backing were called by Venezuelan opposition leader Juan Guaido to end Maduro’s rule, prices increased.
After the government said state-run oil company PDVSA’s operations were not upset and top military leaders persisted loyal, gains were cut down.
A director of energy futures at Mizuho in New York said, “The possibility that Guaido will take control of the situation isn’t as strong as perceived this morning, if Maduro hangs on, you’ll see the market stay lower.”
Brent hit a six-month high above $75 last week. The closing trade of Brent crude futures was above $72.80, kicking a high of $73.27 per barrel and settled 76 cents, or 1.1 percent.
On the day, after kicking a session high at $64.75, U.S. crude futures closed at $63.91, up 41 cents, or 0.7 percent.
Last week, after reports in the industry group American Petroleum Institute said that U.S. crude inventories gain 6.8 million barrels above analysts’ predictions at 1.5 million-barrel figure, prices cut down their gains further in post-settlement trade.
OPEC Marking down Oil Exports for Venezuela
On Wednesday, official government data is due.
U.S. sanctions on PDVSA (Petróleos de Venezuela) have been reducing oil exports from OPEC member Venezuela. According to a survey, the Organization of the Petroleum Exporting Countries control outputs to produce a four-year low.
An analyst said that as the OPEC producer fights with power outages and other problems and if Maduro’s government remains in power for much longer, Venezuela’s crude exports and output will continue to decline.
A senior commodities strategist in Chicago stated, “The situation appears to be getting much worse, rather than better. Their oil production is going to continue to slide.”
Earlier, a deal between producers in cutting output could have possibilities of extending to the end of 2019 as stated by Saudi Arabia Energy Minister Khalid al-Falih.
As Washington has tightened sanctions against Iran, OPEC felt pressure when U.S. President Donald Trump wants to raise outputs.
Agreement on cutting output by around 1.2 million bpd for six months was led by Russia and other OPEC allies until the end of June.
Next steps will be discussed at Vienna for a group meeting on June 25-26.
In February, U.S. crude production fell for the second month in a row, plunging 187,000 barrels per day to 11.7 million bpd.
One partner said, “That’s modestly supportive of prices.”
Adding, “we saw a pullback in operations in reaction to lower prices from last year. It shows the march forward to ever-higher production isn’t limitless.”
Since October 2017, the U.S has been the top global oil producer, and has made growing output to record levels. It facilitated in enhancing domestic crude stocks to their highest.