Oil falls below $62 on US inventories, fading Venezuela concerns

Oil Slides on Disappointing U.S. Data After Hitting Two-Month High

Higher American output is threatening to offset cuts by the Organization of Petroleum Exporting Countries and its allies.

Oil steadied on Thursday as growing expectations that global supply could fall significantly short of demand this year lent support, offsetting the negative impact of a rise in USA inventories. The sanctions will limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran a year ago, some analysts said after examining details announced by the us government.

US oil prices pared losses and turned positive after the data release.

"The ban. dramatically ramps up the sanctions to a global level and could potentially result in a loss of most Venezuelan output", French bank Societe Generale said in a note published on Wednesday.

As for what 2019 holds in store for his company, Dudley remarked, "As we look it, it feels like the markets will be firmer; I couldn't predict the oil price, but we are planning BP between $50 and $65".

US inventories of winter fuels, including propane, shrank by about 4.9 million barrels combined last week, EIA data showed Wednesday.

International Brent crude oil futures were at $62.05 per barrel, up 7 cents, after closing down 0.8 percent in the previous session.

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USA crude was up 42 cents at $54.08 a barrel, while Brent crude was up 63 cents at $62.61 a barrel by 11:25 a.m. EDT [1525 GMT].

Crude futures earlier posted around two-month highs. They closed down 1.7 percent on Tuesday. The United States is now the world's largest oil producer, ahead of traditional top suppliers Russian Federation and Saudi Arabia.

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

“With higher production from non-OPEC producers, especially the USA, over the last few years, OPEC's market share has been shrinking, ” said James Williams, energy economist at WTRG Economics. The S&P Global Platts survey had shown expectations for supply increases of 1.7 million barrels each for gasoline and distillates.

“Looking ahead, the 2019 demand outlook for oil is not great, while the prospects of increased shale supply and competition elsewhere could keep the pressure on prices, ” he said.

Also dampening market sentiment still were worries about weaker global economic growth and the US-China trade dispute.

The producers' alliance, known as OPEC+, began cutting production from last month to avert a new supply glut. Prices are likely to remain rangebound, or drift sideways to lower until the USA and China reach a trade deal.

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