Nigeria’s crude oil production falls to 1.999m bpd

Crude Oil

Crude Oil

In another bullish sign this week, President Donald Trump struck a conciliatory tone on trade talks with China, suggesting higher tariffs might be averted.

WTI has also derived some support after the API reported late on Tuesday a almost 1M barrel drop in U.S. crude oil supplies during last week.

Saudi Arabia will reduce oil production to nearly 9.8 million barrels per day in March, Minister of Energy, Industry and Mineral Resources and Chairman of Saudi Aramco Khalid Al-Falih told the Financial Times.

Oil prices rose on Wednesday as producer club Organisation of the Petroleum Exporting Countries (OPEC) said it had cut supply deeply in January and as United States sanctions hit Venezuela's oil exports.

While US crude production is expected to grow by an amount that exceeds Venezuela's current output, the IEA warned that quantity is not the only important issue.

Supply issues in OPEC-member Venezuela are also bolstering oil prices as the South American country suffers a political and economic crisis, with Washington introducing petroleum export sanctions against state-owned energy firm PDVSA.

The IEA noted that new USA sanctions announced in January on Venezuela's state oil company PDVSA have not so far caused market jitters.

Despite the political rifts between Venezuela and the United States, US refiners have in the past been some of the biggest buyers of Venezuelan crude.

OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1 to prevent excess supply building up. Analysts were looking for a build of about 2.300 million barrels.

The IEA further added that traders shouldn't expect USA sanctions against Venezuela to fuel a rally in oil prices.

Sanctions announced last month prohibit USA corporations and persons from financial transactions with state-owned oil company PDVSA.

However, the Organisation of Petroleum Exporting Countries, OPEC, in its latest monthly oil report released on Tuesday, said Nigeria's oil production dropped to 1.687 million bpd in January from 1.797 million bpd.

Heavy crudes are much harder to refine and tend to contain significant quantities of sulfur and other impurities that are costly to remove, which is why they sell at a hefty discount to medium and light oils. Additionally, gains are being limited by weakening global demand.

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