The price of Oil fell below $62 dollars per barrel on Wednesday after a report showed a rise in U.S. crude inventories. Last week, U.S. crude inventories recorded a 2.5 million barrels increase, according to the American Petroleum Institute, and gasoline stocks also increased. while concerns about the impact on global supplies of U.S. sanctions on Venezuela faded.
Brent crude, the global benchmark, fell to 61.49 dollars a barrel. West Texas Intermediate (WTI) crude fell to 53.11 dollars.
The U.S. sanctions on Venezuela’s state oil company could further curb supplies, although we have yet to see any significant price gains.
Concerns about the trade dispute between the United States and China have also had an effect on the market.
Supply cuts by the OPEC and its allies, including Russia, have been supporting prices. Venezuela, an OPEC member, is like Iran and Libya exempt from making voluntary curbs under the deal.
The producers known as OPEC+ began cutting production from last month to avert a new supply glut and OPEC has delivered almost three-quarters of its pledged cutback already, according to a Reuters survey.
Fritsch of Commerzbank said the Venezuelan issue could still drive oil higher.
“The price has yet to react in any noticeable way,” he said.
“That said, if the other OPEC countries fail to offset this outage, the oil market could quickly become under supplied, driving the price up.” (Reuters/NAN)