Oil ticks higher, market eyes US State of the Union address

US oil prices edge up as market eyes tighter supply

US oil prices edge up as market eyes tighter supply

Moreover, Venezuela is struggling to export oil because of USA sanctions in support of "interim president" Juan Guaidó, who is challenging the incumbent Hugo Chávez. "Moreover, lower oil prices - prices were between 14% and 18% lower in January than their 2018 average - are likely to stimulate economic activity and oil demand, particularly in emerging markets", said Jean-Pierre Durante, Head of Applied Research at Pictet Wealth Management.

United States oil imports from Opec countries have dropped to five-year lows as the oil producing cartel cuts output, while U.S. domestic production grows. Still, "more hard work is needed to turn this market unreservedly bullish".

January 2019 represents one of oil's best monthly performances on record.

In December, lengthy Organization of the Petroleum Exporting Countries (OPEC) discussions finally came to a conclusion, resulting in a larger-than-expected production cut.

"The price has yet to react in any noticeable way", he said. -China meetings next week ahead of a March 1 deadline for trade tariffs to rise.

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 contract increased 35 cents to $54.01 on Wednesday. Distillate stockpiles alone fell by 2.26 million barrels, compared with a decline of 2 million barrels forecast in a Bloomberg survey.

Meanwhile, hopes for thawing China-US relations have also helped ease concerns over slowing economic growth.

USA crude futures were down 75 cents, or 1.39 percent, at $53.26.

Prices are likely to remain rangebound, or drift sideways to lower until the US and China reach a trade deal. They started the year at levels just over $45 per barrel.

Saudi Arabia, the world's top oil exporter, told OPEC it had pumped 10.24 million barrels per day (bpd) in January, two OPEC sources told Reuters, a deeper cut than targeted in the supply pact.

Traders are watching how long a partial closure of the Keystone oil pipeline would last after the discovery of a possible leak in the area of St. Louis Missouri.

The move ratcheted up pressure on Maduro to cede power to National Assembly leader Juan Guaido, who the USA and European allies have recognized as Venezuela's rightful president.

Washington said last week that after April 28 foreign companies will not be able to conduct business with PDVSA using the United States financial system, effectively banning them from paying in U.S. dollars. "Around a third of Venezuela's exports head to the USA, as such, we expect Venezuelan exports to quickly fall by 300,000 barrels per day (bpd) to around 700,000 bpd", ANZ bank said on Thursday.

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