Oil prices rose for a third day on Thursday pushed up by lower imports into the United States amid OPEC efforts to tighten the market as well as Venezuela struggles to keep up its crude exports after Washington imposed sanctions on the nation.
U.S. West Texas Intermediate (WTI) crude futures were at $54.47 per barrel at 0758 GMT, up 24 cents or 0.4 per cent from their last settlement.
International Brent crude oil futures were up 36 cents or 0.6 per cent at $62.01 per barrel.
The price rise came after a report from the U.S. Energy Information Administration (EIA) on Wednesday showed a drop in Saudi crude supply to the United States.
“Crude oil prices were stronger after signs emerged that OPEC cuts are impacting trade.
EIA’s weekly report showed that U.S. imports from Saudi Arabia fell by more than half from the previous week to 442,000 barrels per day (bpd).
“This is the second lowest level in weekly data going back to 2010,” ANZ bank said.
Saudi Arabia is the de-facto leader of the Organisation of the Petroleum Exporting Countries (OPEC) which together with some non-OPEC producers including Russia announced supply cuts late last year aimed at tightening the market and propping up prices.
U.S. sanctions imposed on state-oil firm Petroleos de Venezuela SA (PDVSA) this week is also causing some supply disruptions.
Venezuela’s oil inventories have started to build up at the country’s ports and terminals as PDVSA is finding it cannot export crude at its usual rate due to U.S. sanctions imposed earlier this week.
As of Wednesday, Venezuela had 25 tankers with nearly 18 million barrels of crude – representing about two weeks of the country’s production – either waiting to load or expecting authorisation to set sail, shipping data showed.
Matt Stanley, a broker with Starfuels in Dubai, said the combination of U.S. sanctions against oil producers Venezuela and Iran, the OPEC-led supply cuts as well as hopes that the trade dispute between the United States and China could soon be resolved meant oil prices would likely rise further.
“There are just too many factors that can only cause the price to go one way and that is up,” Stanley said.
Despite this, oil remains in ample supply not least because of soaring U.S. crude oil production which jumped by more than two million bpd last year to a record 11.9 million bpd.
This shows the high U.S. commercial crude oil stockpiles which rose by 919,000 barrels in the week to Jan. 25, to 445.94 million barrels, EIA data showed.
Stockpiles are 6.6 per cent higher than a year ago.