Oil dips on rising U.S. supply, but OPEC cuts lend support

Oil dips on rising U.S. supply, but OPEC cuts lend support

Oil facilities are seen on Lake Maracaibo in Cabimas, Venezuela January 29, 2019.

International Brent crude oil futures were down by 26 cents, or 0.4 per cent, at $62.43 per barrel. The benchmark earlier fell to a session low of $61.05.

US West Texas Intermediate (WTI) crude futures were at $53.82 per barrel at 0607 GMT, down 19 cents, or 0.4 per cent, from their last settlement.

The losses were said to be a reaction to USA government data showing new orders for us -made goods fell in November, especially for machinery and electrical equipment, as well as Genscape reporting that crude inventories at Cushing, Oklahoma rose by over 943,000 barrels in the week to February 1.

"Distillate demand increased sharply last week due to the extreme cold weather, which contributed to the declining distillate stocks", Commerzbank analyst Carsten Fritsch said. "Inventory reports need to confirm any bullish reports if this bounce in oil is to continue", Hekmati added.

The Organisation of the Petroleum Exporting Countries and its allies, including Russian Federation, agreed to production cuts effective from last month to beat back supply growth.

The producers known as OPEC+ began cutting production from last month to avert a new supply glut and OPEC has delivered nearly three-quarters of its pledged cutback already, according to a Reuters survey.

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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.

Meanwhile, U.S. sanctions against Venezuela's oil industry are expected to freeze the sales proceeds of 500,000 bpd. of crude exports.

Venezuela's opposition is opening a USA fund to receive the proceeds of oil sales, a key measure to secure revenue for its effort to dislodge Maduro, an opposition lawmaker said on Wednesday.

Global economic worries have weighed on market sentiment in recent days, offsetting support from signs that global supplies are tightening. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

U.S. 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.

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

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