Venezuela Oil Sanctions Working to Pressure Maduro, Mnuchin Says

Crude Oil

OPEC, and some non-OPEC countries led by Russian Federation, had agreed to remove 1.2 million barrels of crude oil per day from the market starting January 1 to help crude prices increase.

"Moreover, lower oil prices - prices were between 14 percent and 18 percent lower in January than their 2018 average - are likely to stimulate economic activity and oil demand, particularly in emerging markets".

Despite supportive weekly USA energy data, worsening Venezuelan production and relentless supply OPEC cuts intermittently propping oil prices up this week, "there are still fears of slowing demand", said Phil Flynn, analyst at The Price Futures Group brokerage in Chicago.

Oil was one of last year's worst-performing commodities, but the related exchange traded products immediately shook that laggard status to start 2019.

U.S. West Texas Intermediate (WTI) crude futures were at $54.77 per barrel at 0223 GMT, up 21 cents or 0.4 percent. That focuses yet more attention on the outcome of U.S.

"We've been turning the heat up on the regime", Mnuchin said Wednesday, touting the effectiveness of fresh sanctions that President Donald Trump's administration imposed January 28. The month was Brent crude's best month since April 2016.

The producers known as OPEC+ started cutting production by 1.2 million barrels per day (bpd) from last month to avert a new supply glut, and OPEC has delivered nearly three quarters of its pledged cuts already, a Reuters survey showed last week.

US sanctions against Venezuela's oil industry are expected to freeze sales proceeds of Venezuelan crude exports to the United States.

WTI futures have declined from a peak for this year of $55.26 per barrel on Friday.

In December, lengthy Organization of the Petroleum Exporting Countries (OPEC) discussions finally came to a conclusion, resulting in a larger-than-expected production cut. The sanctions aim to block U.S. refiners from paying into PDVSA accounts controlled by Venezuelan President Nicolas Maduro.

Total products supplied over the last four-week period averaged 21.2 million barrels per day, up by 2 percent from the same period previous year.

A rebound from late December lows seemed to stall amid worries that a trade war between the USA and China would continue, weighing on demand.

Concern about weaker global economic growth and the trade dispute between the United States and China have also weighed on sentiment.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will lead a delegation to Beijing next week to lay the groundwork for a meeting between Presidents Donald Trump and Xi Jinping later this month.