Oil up on reduced U.S. output estimate, stalled Venezuelan exports

Oil prices rose on Wednesday, buoyed by an official forecast showing slower-than-expected U.S. production, and as U.S. sanctions stall exports from Venezuela.
International Brent crude oil futures were at $66.89 a barrel at 0955 GMT, up 22 cents, or 0.33 percent, from their last close.

U.S. West Texas Intermediate crude futures were at $57.31 per barrel, up 44 cents, or 0.77 percent.

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The U.S. Energy Information Administration (EIA) said on Tuesday that U.S. crude production was expected to grow more slowly in 2019 than it had previously expected, averaging about 12.30 million barrels per day (bpd).

The EIA revised down its projected 2020 production figure from 13.20 million bpd to 13.03 million bpd.

“While the revision is small, the comforting part for bulls was that the direction of the revision was down rather than up,” Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum.

U.S. crude stocks also fell unexpectedly last week, data from the American Petroleum Institute showed on Tuesday, in a good sign for oil demand as supply from various producers was being curbed.

“The oil market maintained its buoyancy, thanks to Monday’s Saudi commitment to deep supply cuts and power outages in Venezuela crippling the loading of oil at key terminals,” Tchilinguirian added.

Oil prices have been pushed up this year by supply cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries.

Saudi Energy Minister Khalid al-Falih said on Sunday that the production-curbing agreement would likely last until at least June. Saudi Arabia, the world’s top oil exporter, indicated on Monday that it would cut April exports.
Markets have been further tightened by U.S. sanctions against oil exports from OPEC members Iran and Venezuela.

Venezuela’s worst blackout on record has left most of the country without power for six days, with hospitals struggling to keep equipment running, food rotting in the tropical heat and exports from the country’s main oil terminal stranded.

“Failures in the electrical system … (are) likely to accelerate the loss of 700,000 barrels per day” in oil supply, Barclays bank said.

National Australia Bank reported a mixed outlook for oil, with global economic concerns and strong oil supply growth from the United States keeping prices in check but OPEC supply cuts and U.S. sanctions on Iran and Venezuela driving them up.

Source: News Agencies