Oil Slides on Disappointing U.S

Oil Slides on Disappointing U.S

Countering the rising US crude output and inventories are voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at tightening the market and propping up prices. While sanctions on Venezuela and Iran are supportive of prices, investors are wary before U.S.

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

A flotilla loaded with Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest US sanctions on Venezuela and others whose buyers are weighing who to pay.

With fresh sanctions potentially looming, a flotilla loaded with about 7 million barrels of Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest USA sanctions and others whose buyers are weighing who to pay, according to traders, shippers and Refinitiv Eikon data.

The key story supporting the market and driving the price action is the OPEC-led production cuts. The contract increased 35 cents to $54.01 on Wednesday.

Brent crude, the global benchmark, slipped 4 cents to $61.94 a barrel by 1331 GMT. The month was Brent crude's best month since April 2016.

Still, some analysts were relieved that United States crude oil inventories only rose by 1.3 million barrels in the week to February 1, according to the EIA, compared with expectations for an increase of 2.2 million barrels.

According to a separate report by FXDailyReport analyst Katrina Ang, analysts expectations were for an inventory expansion of up to 2.2 million barrels.

"Despite several forays in WTI above our prior resistance of $55, the market continues to draft back down largely under the pressure of this week's stronger dollar", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

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

More stringent sanctions on Venezuela that bar companies that do business with PDVSA from accessing the USA financial system resemble Washington's measures on Iran, ANZ Banking Group said.

Market participants are also watching for developments surrounding the U.S.

US President Donald Trump said in his State of the Union address that a trade deal was possible with China. "Around a third of Venezuela's exports head to the U.S., 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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