Venezuela reports collapse in oil supply, tightening global market - OPEC

Venezuela reports collapse in oil supply, tightening global market - OPEC

Venezuela reports collapse in oil supply, tightening global market - OPEC

Oil prices started Thursday with a decline as crude oil inventories in the US increased much higher than market expectation and crude production in the country remained at record high levels.

Though oil prices like the Brent Crude and Nigeria's Bonny Light traded above $71 yesterday, Nigeria needs to ramp up production albeit the agreed OPEC cuts to meet its fiscal responsibilities.In its monthly oil market report, OPEC estimates demand for its crude to average 30.30 million b/d in 2019, a fall of 1.05 million b/d on the year, signifying that oil inventories are going to decline sharply, pointing to a very tight market.

United Arab Emirates' energy minister said on Wednesday that Russian Federation was committed to its oil supply cut agreement with OPEC and would not raise its output unless in co-ordination with the exporting group.

Net U.S. crude imports rose last week by 210,000 barrels per day (bpd) while exports alone fell by 374,000 bpd to 2.3 million bpd, the lowest level since late January. Crude oil output decreased mostly in Saudi Arabia, Venezuela, Iraq, and IR Iran, while production increased in Libya, Congo and Nigeria.Demand for OPEC crude in 2018 averaged 31.35 million b/d.

Saudi energy minister said Monday it was premature to say whether a consensus existed among OPEC and its allies to extend oil supply cuts but a meeting next month would be key.

The Dutch bank said the reduction was not only down to voluntary supply cuts, which the group started this year to prop up prices, but also sanctions by the United States.

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"U.S. crude oil inventories remain stubbornly high", it added. "Declines from these two exempt countries account for nearly 47 percent of the reduction seen from OPEC", ING said.

According to the Department of Energy, America's stores of commercial crude oil rose by 7.0m barrels over the week ending on 5 April to reach 456.5m barrels (consensus: 2.3m b/d), leaving them at their average level of the past five years.

ANZ bank said on Wednesday that it expects Brent oil prices to push "towards $79 per barrel".

The United States and China have yet to find a solution to their dispute on trade, while the International Monetary Fund on Tuesday cut its global economic growth forecasts.

Speaking at a conference in Abu Dhabi, Mazroui also said the UAE can raise its crude oil production up to 3.5 million bpd if needed.

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