Equinor’s oil platform in Johan Sverdrup oilfield in the North Sea, Norway. Picture: REUTERS/NERIJUS ADOMAITIS
Equinor’s oil platform in Johan Sverdrup oilfield in the North Sea, Norway. Picture: REUTERS/NERIJUS ADOMAITIS

Singapore — Oil prices fell on Thursday after US crude inventories rose and as production levels in the country held at record levels, but Opec-led supply cuts and Washington’s sanctions against Venezuela supported markets.

US West Texas Intermediate (WTI) crude futures were at $53.84 a barrel at 2.47am GMT, down 17c, or 0.3%, from their last settlement.

International Brent crude oil futures were down by 26c, or 0.4%, at $62.43 a barrel.

US crude oil inventories climbed by 1.3-million barrels in the week that ended February 1 to 447.21-million barrels, data from the Energy Information Administration (EIA) showed on Wednesday.

Meanwhile, average weekly US crude oil production remained at the record 11.9-million barrels a day it reached in late 2018. The US is currently the world’s largest oil producer, ahead of traditional top suppliers Russia and Saudi Arabia.

Countering the rising US crude output and inventories are voluntary supply cuts led by producer cartel Opec aimed at tightening the market and propping up prices.

Meanwhile, US sanctions against Venezuela's oil industry are expected to freeze the sales proceeds of 500,000 barrels a day of crude exports.

“The cumulative effect of Opec-led output cuts along with additional US sanctions on Venezuela's state oil company … bolstered market sentiment,” said Benjamin Lu of Singapore-based brokerage Phillip Futures in a note on Thursday.

French Bank BNP Paribas cut its estimated average of 2019 prices for Brent to $68 a barrel and for WTI to $61 a barrel, both down by $8 from its previous outlook.

“We expect the oil price to rise in the first-half of 2019 on tightening supply conditions and decline in the second-half on weakening economic activity and an increase in US crude exports to international markets,” said French bank BNP Paribas.

Reuters