Crude oil prices rose Wednesday after top exporter Saudi Arabia said it would cut crude exports and cut even more from its production, with ever-growing U.S. crude oil inventories paring gains.
U.S. crude oil inventories rose last week to the highest point since November 2017, as refiners cut runs to the lowest since October 2017, the Energy Information Administration reported.
The increase came despite falling net imports, which dropped to the lowest on record, as domestic crude production remained at peak levels for the fifth consecutive week.
U.S. West Texas Intermediate crude futures ended Wednesday’s trading session 80 cents, or 1.5%, higher, at $53.90 a barrel, Kallanish Energy reports.
Brent crude futures rose $1.19, or 1.9%, to $63.61/Bbl. Brent earlier in the session touched $63.98/Bbl, but pulled back after the inventory data was released.
U.S. crude stockpiles rose by 3.6 million barrels (Mmbbl) in the week ended Feb. 8, EIA reported.
On Tuesday, Saudi energy minister Khalid al-Falih told the Financial Times production would fall below 10 million barrels per day (Mmbpd) in March, more than 500,000 Bpd below the target it agreed to.
In late 2018, roughly 24 producer-nations, including most of Opec and a number of other producers led by Russia (collectively know as Opec+), agreed to cut 1.2 Mmbpd of production, effective Jan. 1.
OPEC said Tuesday it had cut its collective output by nearly 800,000 Bpd in January, to 30.81 Mmbpd.
U.S. sanctions on Venezuela’s energy industry threaten to remove some 330,000 Bpd in supply from the market this year, according to Goldman Sachs, Reuters reported.
The oil price has risen by 20% in 2019, yet most of that increase came in early January, pre-U.S. sanctions on Venezuela.
The global oil market remains well supplied and output would still likely surpass demand this year, despite OPEC’s efforts and U.S. sanctions on Iran and Venezuela, the International Energy Agency said in its monthly market report issued Wednesday.
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