Over the past four weeks, motor gasoline product supplied averaged 9 million barrels per day, up by 1.6 percent from the same period previous year. The worry was that the sanctions, targeting specifically PDVSA, will result in a shortage of heavy crude for USA refineries on the Gulf Coast, but in actuality, there seems to be sufficient spare production capacity around the world to fill any supply gap resulting from the latest developments in and around Venezuela.
Benchmark Brent crude had slipped 62 cents to $61.36 a barrel by 1000 GMT, after rallying about 15 percent in January. Both lines carry Canadian crude to the U.S.
The report revealed that there have been encouraging signs in trade talks between the U.S. and China over tariffs recently, and any agreement between the two countries could provide upside to oil demand, and indeed oil prices, going forward.
However, U.S. crude stocks rose last week even as refineries boosted output, while gasoline and distillate stocks increased, data from industry group the American Petroleum Institute showed on Tuesday. The month was Brent crude's best month since April 2016.
WTI prices were $46.54 per barrel at the start of the year, rising to current levels in part on geopolitical concerns about Venezuela, as well as on the possibility of an economic slowdown in China. OPEC and associated partners agreed to cut 1.2 million barrels per day with OPEC being responsible for 800,000 barrels.
The key story supporting the market and driving the price action is the OPEC-led production cuts.
While OPEC and allied producers are slashing their output in an attempt to boost crude prices, which saw a rapid fall a year ago, the United States has been opposing the measure and vowed to continue expanding its supply. The sanctions aim to block USA refiners from paying into PDVSA accounts controlled by Venezuelan President Nicolas Maduro.
However, while OPEC is cutting output, the United States has expanded supply, with production most recently totaling 11.9 million bpd.
Worries about weaker global economic growth and the U.S.
Considering the recent pattern of global economics, coupled with negative impact of trade protectionism, chances are high that crude might not recover to its late 2018 highs unless OPEC+ delivers strong cuts going forward. -China talks to end the trade war between the world's top two economies.
U.S. President Donald Trump last week said he would meet his Chinese counterpart Xi Jinping in the coming weeks to try to settle the dispute.
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