Crude Oil Futures Lower on API Data, Venezuelan Sanctions

OILMONSTER.COM- Crude oil futures were lower during mid-morning trade in Asia Thursday amid bearish data released on US crude inventory by the American Petroleum Institute while sanctions on Venezuela's oil sector curtailed the downfall.

At 10:30 am Singapore time (0230 GMT), ICE March Brent crude futures were down 37 cents/b (0.61%) from Wednesday's settle at $60.77/b, while the NYMEX March light sweet crude contract was 33 cents/b (0.63%) lower at $52.2/b.

US crude inventory for the week ended January 18 was up nearly 6.6 million barrels, according to analysts' reports quoting data released by the API Wednesday. Analysts surveyed Tuesday by S&P Global Platts were looking for US crude stocks to have dipped by 600,000 barrels for the same period.

"Big crude build, " The Price Futures Group analyst Phil Flynn said in a note, describing the API data.

"Crude oil futures fell on Wednesday as traders deliberated a surprise build in US crude oil inventories, " Benjamin Lu, investment analyst at Phillip Futures said.

US product inventory was also bearish with the API reporting that US gasoline inventories were up 3.6 million barrels while US distillate inventories were up 2.6 million barrels last week.

The official data on last week's US crude inventory levels is due for release from the US Energy Information Administration later Thursday.

Prices also reacted to comments made by Chinese Vice President Wang Qishan who spoke at the World Economic Forum at Davos on Wednesday.

Amid the ongoing trade strife between US and China, Qishan warned of risks to the global order from protectionism and populism.

"Crude oil came under pressure as concerns of faltering global growth remained at the forefront in investor's minds. Chinese Vice President Wang Qishan warned of risks to the global order from protectionism and populism, " said ANZ analysts in a note Thursday.

Elsewhere, US President Donald Trump on Wednesday officially recognized Venezuelan opposition leader Juan Guaido as the legitimate president of Venezuela, a designation that could impact Venezuelan state-run oil company PDVSA's access to oil export revenue and complicate commercial deals with US refiners.

The White House has also prepared sanctions on Venezuela's oil sector, including a full embargo on imports of Venezuelan crude, sources familiar with the plan said.

"Everything is on the table," a senior administration official said Wednesday. "All options."

Crude prices however continued to remain concerned about global supply and demand factors, analysts said.

"Though oil prices have demonstrated for higher upside potential in Q1 2019, mounting economic challenges will continue to impede exponential gains in the longer term, " Lu said.

As of 0230 GMT, the US Dollar Index was down 0.04% at 95.775.

Courtesy: www.spglobal.com