Worldwide oil prices dip as USA crude inventories rise

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

The impact of OPEC+'s supply curbs has been boosted by USA sanctions on Venezuelan state-owned oil firm PDVSA.

At 11:00 GMT, March WTI crude oil is trading $53.69, down $0.32 or -0.57% and April Brent crude oil is at $62.44, down $0.25 or -0.40%.

Supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies since January have been supporting prices.

Meanwhile, average weekly USA crude oil production remained at the record 11.9 million barrels per day (bpd) it reached in late 2018. "Also underpinning the market is strong adherence to the OPEC-led supply cuts during January", reports OilPrice.com.

Prices also dipped after data showed US crude inventories at Cushing, Oklahoma, the delivery point for USA crude futures, rose by more than 943,000 barrels in the week to February 1, traders said, citing data from market intelligence firm Genscape.

U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 1.27 percent, to settle at $54.56 a barrel. "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.

Gasoline stocks increased by 513,000 barrels, less than anticipated, while distillate stockpiles posted a larger-than-expected drop by 2.3 million barrels.

A day after the American Petroleum Institute disappointed oil bulls by reporting an estimated inventory build across the board, the Energy Information Administration deepened the mood by saying USA crude oil inventories added 1.3 million barrels in the week to February 1.

Venezuela, like fellow OPEC members Iran and Libya, was exempt from production curbs under the OPEC+ deal on expectations that its output faced involuntary downward pressure in 2019.

"The market seems to be turning on renewed worries that there doesn't seem to be a lot of progress on the U.S". It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

Concern about weaker global economic growth and the trade dispute between the United States and China have also weighed on sentiment. Oil fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

With a nervous market, traders are focused on the U.S. State of the Union address by President Donald Trump.

Trump has vowed to increase US tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent now if the two sides can not reach a deal by March 1.

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