Economy

Oil Falls on US Factory Data

Oil Falls on US Factory Data”

OPEC, Russia and other non-OPEC producers - an alliance known as OPEC+ - agreed in December to reduce supply by 1.2 million barrels per day (bpd) from January 1.

USA crude futures were down 50 cents, or 0.9 percent, at $54.06 a barrel by 1400 GMT.

At 447.2 million barrels, the EIA said, us crude oil inventories are still above the seasonal average but not by much.

Taking control of oil revenues - the basis of Venezuela's economy - from Maduro and giving it to Guaido, and the decision to sanction oil companies, is the boldest USA move so far to raise pressure on Maduro.

Oil prices rose about 1 percent on Wednesday, boosted by signs of strong USA demand for distillate products and tightening global crude supply, but gains were capped by a rising U.S. dollar and ongoing concerns about a global economic slowdown, Trend reports citing Reuters.

During the London open, crude oil prices slipped, tumbling from two-month highs, as worries over a global economic slowdown crawled back into the market.

The head of state-run Kuwait Petroleum Corp, Hashem Hashem, said on Tuesday that global oil supply could be hit this year by big reductions in exports from Venezuela.

USA sanctions announced last Monday on Venezuelan oil companies are likely to cause Maduro economic woes.

Echoing the view, Sukrit Vijayakar of Trifecta Consultants added that prices are unlikely to spike as the USA does not want crude oil prices to rise and as shale producers respond to the price rise by pumping more. "Because the number was a little disappointing, it played into the slowing demand scenario", said Phil Flynn, oil analyst at Price Futures Group in Chicago.

If sanctions compel US oil companies to wind down their business in the Latin American nation, production could sink to 600,000 barrels a day, according to Rapidan Energy Group.

OPEC's share of the cut is 800,000 bpd, to be delivered by 11 members - all except Iran, Libya and Venezuela.

WTI futures were at 54.65 dollars per barrel at 0810 GMT, up nine cents or 0.16 per cent. US Treasury Secretary Steven Mnuchin told reporters that by blocking PDVSA's assets, the United States was preserving the assets of the company in the interests of the people of Venezuela and also protecting its own market. -China trade dispute. Oil prices fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

U.S. President Donald Trump last week said he would meet his Chinese counterpart Xi Jinping in the coming weeks to try to settle the dispute.



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