Oil falls 1 percent as supply concerns fade

OPEC supply fell in January by the largest amount in two years

Prices, which settled at a one-week low on Tuesday, were trading at $53.20 before the supply data.

According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 1.3 million barrels from the previous week.

According to the Energy Information Administration (EIA), U.S. crude oil inventories climbed by 1.3 million barrels in the week-ended February 1 to 447.21 million barrels.

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.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.4 million barrels, EIA said. "The build is once again only modest, given stymied imports and strong exports". The government's official supply report due later on Wednesday.

Gasoline stocks rose by 513,000 barrels, compared with analyst expectations in a Reuters poll for a 1.6 million-barrel gain.

March natural gas NGH19, +0.56% settled flat at $2.662 per million British thermal units.

As for what 2019 holds in store for his company, Dudley remarked, "As we look it, it feels like the markets will be firmer; I couldn't predict the oil price, but we are planning BP between $50 and $65".

"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.

"The price has yet to react in any noticeable way", he said.

“That being said, the downside could be limited as the OPEC and 10 partner producers outside the cartel are supposed to be actively managing output in an effort to rebalance the market, ” said Razaqzada.

Supply cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, have been supporting prices. OPEC, excluding Iran, Libya and Venezuela, agreed to handle 800,000 barrels a day of those cuts.

"You have the sanctions on Venezuela, on top of the reduced supply from Saudi Arabia", Olivier Jakob, oil analyst at Petromatrix, said as cited by Reuters. "There's no sign of overhang in the crude oil markets".

US distillate stocks fell by 2.3 million barrels, while inventories of other refined fuels dropped by 2.9 million barrels. A “partnership would control a greater market share and [offer] more control over the market.”.

Daniel Yergin, vice chairman of IHS Markit, agreed: "I think the oil price is moved by what happens with the overall financial markets; it means sentiment will have a bigger impact on the oil price, [and] a big surge in US oil production becomes bearish for the global market so you get more and more complicated feedback loops".

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