Oil falls as US maintains record output, inventories climb

Crude Oil

US crude stocks rose less than expected last week, while gasoline stocks increased and distillate inventories fell, the Energy Information Administration said on Wednesday.

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

"Distillate demand increased sharply last week due to the extreme cold weather, which contributed to the declining distillate stocks", said Commerzbank analyst Carsten Fritsch.

Net U.S. crude imports fell last week by 863,000 barrels per day.

US West Texas Intermediate (WTI) futures were at $55.13 per barrel, down 13 cents, or 0.24 percent, from their last settlement.

The fund would receive income accrued by state-run oil firm PDVSA's U.S. unit Citgo Petroleum Corp since last month, when U.S. President Donald Trump recognized opposition leader Juan Guaido as Venezuela's legitimate head of state, Carlos Paparoni said in an interview.

"It would seem that the market is really not too anxious yet about the potential loss of Venezuelan barrels", said analysts at JBC Energy in a report.

"This is either because the market assumes that the size of the impact will not be large, or at least it will be of short enough duration", they wrote. -China trade war, which has dragged on world markets as investors worry that the dispute could contribute to a potential global economic slowdown. Oil fell on Tuesday after a survey showed euro zone business expansion almost stalled in January. Prices are likely to remain rangebound, or drift sideways to lower until the USA and China reach a trade deal.

Supply cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, have been supporting prices.

Venezuela, like fellow OPEC members Iran and Libya, was exempt from production curbs under the OPEC+ deal on expectations that its output faced involuntary downward pressure in 2019.

However, while OPEC is cutting output, the United States has expanded supply, with production most recently totaling 11.9 million bpd.

"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.

"Because the number was a little disappointing, it played into the slowing demand scenario", said Phil Flynn, oil analyst at Price Futures Group in Chicago. "That said, if the other OPEC countries fail to offset this outage, the oil market could quickly become undersupplied, driving the price up". The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.

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