Opec oil production falls as Saudi Arabia slashes output
- Author: Darren Santiago Feb 14, 2019,
Feb 14, 2019, 0:46
"Disruptions have increased with risks that Venezuela's production decline accelerates following the introduction of additional US sanctions related to the Venezuelan oil industry", the investment bank said.
USA crude futures were up $1.07 to $54.17 a barrel.
"The imposition of sanctions by the United States against Venezuela's state oil company Petroleos de Venezuela (PDVSA) is another reminder of the huge importance for oil of political events", the Paris-based IEA said Tuesday.
The U.S. bank expects benchmark Brent crude prices to touch $67.50 per barrel in the second quarter of 2019, up from $63.07 per barrel at 0638 GMT on Wednesday.
The global oil market will struggle this year to absorb fast-growing crude supply from outside OPEC, even with the group's production cuts and USA sanctions on Venezuela and Iran, the International Energy Agency said in a report on Wednesday.
The cartel's scale-back was in line with an agreement by Opec and non-Opec members in December to trim production by 1.2 million barrels a day from January 1.
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Soaring output is putting the US on course to become a net exporter of crude oil and petroleum products next year.
While global markets remain comfortably supplied, disruption in Venezuela poses a threat because production of the heavier, higher-sulfur crude it pumps is being reduced elsewhere, the IEA said in a monthly report.
In the meantime, the political rift between Venezuela and the United States continues with the USA sanctions against the South American nation giving prices a slight boost. Venezuela announced that it would sell more oil to India.
According to the decision the OPEC+ countries adopted at the meeting on December 7, 2018, the alliance will reduce production in the first half of 2019 by 1.2 mln barrels. But a shortfall of heavy-sour crude can cause complications for many refiners, such as those along the U.S. Gulf Coast, configured to process it. The supply cuts, which also include Russian Federation and nine other non-OPEC producers, took effect on January 1.
The OPEC, which Saudi Arabia de-facto leads as the world's top crude oil exporter, said on Tuesday that it had cut its output by nearly 800,000 bpd in January to 30.81 million bpd. In response to Maduro's call for aid, an OPEC spokesman familiar with the subject matter had been quoted saying that the Organization of the Petroleum Exporting Countries (OPEC), declined to make any formal statement and said that they were more concerned about their policies, not politics. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.