Crude oil prices rose Wednesday, helped by signs of strong U.S. demand for distillate products and tightening global crude supply.
Gains were capped by a rising U.S. dollar and ongoing concerns about a global economic slowdown.
U.S. West Texas Intermediate crude futures settled 35 cents higher Wednesday at $54.01 a barrel, after posting a session low of $52.86/Bbl, Kallanish Energy reports.
International benchmark Brent crude futures rose 64 cents, or 1%, to $62.62/Bbl at roughly 2:25 p.m. EST. The benchmark earlier fell to a session low of $61.05/Bbl.
U.S. government data Wednesday showed domestic crude inventories rose by less than expected one week ago even as refineries raised output. Inventories rose by 1.3 million barrels (Mmbbls) during the week ended Feb. 1.
Market participants are looking for signs of tightening global crude supply after Opec and its producer-country allies led by Russia (collectively known as Opec+) began reducing production by 1.2 million barrels per day (Mmbpd), effective Jan. 1.
U.S. sanctions on Venezuela’s state oil company, PDVSA, could also raise prices. The sanctions aim to block U.S. refiners from paying into PDVSA accounts controlled by Venezuelan President Nicolas Maduro.
Venezuela, like fellow Opec members Iran and Libya, was exempt from production curbs under the Opec+ deal on expectations its output faced involuntary downward pressure in 2019.
However, a stronger U.S. dollar limited gains Wednesday. A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.
Also tamping market sentiment were ongoing worries about weaker global economic growth and the U.S.-China trade dispute.
This post appeared first on Kallanish Energy News.