Oil prices rose about 1 percent on Wednesday, boosted by signs of strong U.S. demand for distillate products and tightening global crude supply, but gains were capped by a rising United States dollar and ongoing concerns about a global economic slowdown, Trend reports citing Reuters.
The API reported a 2.5M barrel build during last week.
This news may have been offset by robust U.S.jobs data and a stronger-than-expected ISM Manufacturing PMI report on Friday, but traders turned bearish on Monday when the government reported that new orders for USA -made goods unexpectedly fell in November amid sharp declines in demand for machinery and electrical equipment, suggesting a slowdown in manufacturing as 2018 ended.
Institutions also increased their holdings of Brent crude at the end of January with the latest ICE Futures data showing holdings increasing by 30 million barrels to 233 million barrels, according to Reuters.
"PDVSA will redirect exports to other customers in Europe and Asia", the technical adviser at Venezuela's oil company PDVSA and Petroleum Ministry, Ronny Romero, told Sputnik.
At the same time, Venezuela's exports to the USA dropped by almost 30%.
Brent crude, the global benchmark, slipped 24 cents to $61.74 a barrel by 1442 GMT.
United States energy firms last week cut the number of oil rigs operating to their lowest in eight months as some drillers followed through on plans to spend less on new wells this year.
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U.S. sanctions on Venezuela have been viewed as supportive for prices by helping tighten global supplies.
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.
U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 1.27 percent, to settle at $54.56 a barrel.
"The price has yet to react in any noticeable way", Fritsch said of the sanctions announced last week.
OPEC's share of the cut is 800,000 bpd, to be delivered by 11 members - all except Iran, Libya and Venezuela. Brent reached $63.63 a barrel, the highest since December 7, while WTI climbed to $55.75 a barrel, the strongest since November 21. These concerns, in combination with uncertainty in the US-China trade negotiations keep weighing on traders' sentiment.
Last week, China said its manufacturing activity contracted for the second-straight month in January, another sign that the world's second-largest economy is slowing down amid domestic headwinds and the on-going trade dispute with the U.S.
Senior U.S. and Chinese officials are poised to start another round of trade talks next week.