Meanwhile, Barclays bank added, "Oil production is rapidly falling and companies that normally resell Venezuelan crude have not found ways to mitigate the effect of the USA sanctions".
USA sanctions on Iran and Venezuela have choked off supply of the heavier, more sour crude that tends to yield larger volumes of higher-value distillates, as opposed to gasoline.
TransCanada is beginning fix and restoration work on the Keystone crude oil pipeline following an oil spill, a spokesman said Wednesday.
"In quantity terms, in 2019, the U.S. alone will grow its crude oil production by more than Venezuela's current output". The global crude benchmark traded at a $9.30 premium to WTI. The cartel and the world's biggest exporter, Saudi Arabia, slashed its output more than expected under the OPEC deal, to 10.2 million barrels a day in January and is aiming to pump around 100,000 barrels less in February.More news: NCAA Live Stream Reddit for Wisconsin vs Michigan State
The combination of the OPEC-led production cuts, the increased reduction by the Saudis and in a limited way, the sanctions against Venezuela are helping to underpin prices, but in order to put the market over the top, demand is going to have to increase.
The country's very dense crudes, some of which barely float on water, are complicated to process and sell for a large discount compared to other producers.
Production has been hampered by corruption, political interference and lack of foreign investment and technology to maintain existing fields and develop new ones. Analysts were looking for a build of about 2.300 million barrels.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1 to prevent excess supply building up. "China trade talks, ignoring the risks now in place from the loss of Venezuelan barrels", USA bank J.P. Morgan said in a weekly note.More news: Ultra-processed foods push death risk up by 14 percent, study says
U.S. oil supplies dropped by almost 1M barrels last week, API reported.
The U.S. Treasury's guidance, which appears deliberately unclear, has left many third-country buyers uncertain about whether they can do business with PDVSA without also falling foul of sanctions.
But climbing US oil stockpiles weighed on prices.
Venezuela accounted for 1 million bpd of heavy-sour crude production out of a worldwide total of 7 million bpd in 2017 ("World Oil Review", ENI, 2018).More news: US Rapper Shot Dead By Six Police While Asleep In His Car