USA shale producers have cut back on production, while crude imports in the US over the past four weeks are down 7.5% from previous year and tanker tracking data indicate a decline in Saudi crude shipments.
The U.S., Venezuela's biggest customer, is banning oil imports from the country as it condemns President Nicolas Maduro for fraudulently clinging to power after disputed elections.
U.S. West Texas Intermediate crude oil futures ended Wednesday's session 80 cents higher at $53.90 a barrel, a 1.5 percent gain.
International Brent crude oil futures had yet to trade.
After the sanctions were imposed, the heavy sour grade Castilla and Vasconia, a medium sour grade from Colombia, saw their prices jump last week to their highest since September 2017, as per S&P Global Platts data.
On Tuesday, the American Petroleum Institute (API) said USA crude inventories fell by 998,000 barrels in the latest week, trouncing forecasts by analysts in a Reuters poll for a rise of 2.7 million barrels. "The market is holding up because of the outside markets, the hope for a trade deal, and a strong Dow", he said.
But some said supply-side risks were not receiving enough focus. Saudi Arabia has limited its production even further than previously promised, 10 million barrels per day.
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There are also reports Kensington Palace is considering taking legal action over the letter being given to the press. This week, Thomas released excerpts of the letter that saw her rebuff claims she had never reached out to him.
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A round of talks at the end of January ended with some progress reported, but no deal and US declarations that much more work was needed.
The Paris-based organisation said that OPEC crude output dropped by 0.93 million barrels per day (mbd) to 30.83 mbd in January.
Given OPEC-kingpin Saudi's depth of relationship with Unites States, one of the recent evidences of which could be a Central Intelligence Agency cover-up of Saudi Journalist Jamal Khashoggi's high-rated murder on Saudi Crown Price, Mohammed bin Salman's order, OPEC was expected to give a cold shoulder to Maduro's call, multiple analysts commented following the reveal of OPEC response. This doesn't bode well for the long-term crude oil bulls. "Reports are emerging that PDVSA is scrambling to secure new markets for its crude, after the U.S. placed additional sanctions on the country", ANZ bank said on Monday.
The oil price may also have risen due to the news that Saudi Aramco, Saudi Arabia's largest oil company, will invest billions more in exploration of gas and oil outside its borders.
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.
Non-OPEC production growth, especially USA shale boom has left less room for OPEC members to keep their production high. "Crude-oil quality is another issue, and, in the wider context of supply in the early part of 2019, it is even more important".
USA crude output is expected to grow by 1.45 million bpd this year and by another 790,000 bpd next year to hit 13 million bpd in 2020, according to the EIA. "This is because, in terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations", the group added. Refining margins for gasoline have collapsed.