Oil rises 1 percent on signs of tightening global oil supply

US oil prices edge up as market eyes tighter supply

Oil prices have been on the rise since the US Treasury announced the seizure of $7 billion in assets of Venezuela's state oil firm PDVSA and its US subsidiary Citgo last week.

US oil prices dipped on Thursday after USA crude inventories rose and as production levels in the country stayed at record levels, but OPEC-led supply cuts and the crisis in Venezuela supported markets.

“The key supply story remains the ongoing OPEC production cuts, ” US bank Goldman Sachs said on Wednesday.

Both U.S. crude oil imports and exports increased during the week ending February 1, the U.S. Energy Information Administration (EIA) said on Wednesday.

US West Texas Intermediate (WTI) crude futures were at $53.82 per barrel at 0607 GMT, down 19 cents, or 0.4 per cent, from their last settlement.

Libya saw its December production impacted by internal violence, as the cut resulted from the shutdown of oil fields for safety after occupation by militia forces.

-China summit are frustrating oil bulls hopes of seeing USA crude above $55 per barrel.

"The price has yet to react in any noticeable way", Fritsch said of the sanctions.

Oil falls 1 percent as supply concerns fade
Also dampening market sentiment still were worries about weaker global economic growth and the US-China trade dispute. Meanwhile, imports are set to drop further as the U.S. slapped sanctions on Venezuelan state oil company PDVSA.

Opec's sales to the world's biggest economy fell 22 per cent month-on-month and 37 per cent year on year, to 1.4m barrels per day, data from energy intelligence company Kpler shows.

Also dampening market sentiment still were worries about weaker global economic growth and the US-China trade dispute.

"Anything out of the State of the Union that hints at the U.S".

Market participants are also watching for developments surrounding the U.S.

The oil price is showing a 20 percent gain so far this year. "Moreover, lower oil prices - prices were between 14% and 18% lower in January than their 2018 average - are likely to stimulate economic activity and oil demand, particularly in emerging markets", said Jean-Pierre Durante, Head of Applied Research at Pictet Wealth Management.

Russia has been in full compliance with its pledge to gradually cut its oil production, Russian Energy Minister Alexander Novak said in a statement on Monday, adding that production decreased by 47,000 barrels per day (bpd) in January from October.

Adding to the bearish sentiment, CNBC reported that a meeting between President Donald Trump and his Chinese counterpart Xi Jinping was "highly unlikely" before the March 1 deadline set by the US for reaching a trade deal.

Senior US and Chinese officials are poised to start another round of trade talks next week.

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