Equipment used to process carbon dioxide, crude oil and water is seen at an Occidental Petroleum Corp enhanced oil recovery project in Hobbs, New Mexico, U.S. on May 3, 2017.
The reduction came mostly from the world's top oil exporter and Opec kingpin Saudi Arabia, which cut 350,000 barrels per day, followed by the United Arab Emirates and Kuwait. "China trade negotiations and less-ambitious monetary tightening by the U.S. Federal Reserve", OPEC said in the report.
In its monthly report released yesterday, OPEC said its crude output fell 797,000 barrels per day (bpd) in January compared with the prior month.
The "call" on OPEC crude is now forecast at 30.7 million bpd in 2019, down from the IEA's last estimate of 31.6 million bpd in January.
Moreover, economic sanctions introduced by Washington against Venezuela and Iran are bolstering crude prices by enforcing a global supply limit.
Oil prices are gaining on Tuesday as the OPEC-led supply deal and USA penalties against Iran and Venezuela begin to take hold after crude futures hit two-week lows earlier this week.
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Although the US sanctions on Venezuela are creating a heavy crude crunch on the oil market, the EIA says that the sanctions are unlikely to have a significant impact on the refinery runs of the USA refiners.
"Stocks in most markets are now ample and. there is more spare production capacity available".
Oil production in Venezuela, which has been rocked by a crippling economic crisis, spiralling political turmoil and U.S. sanctions, meanwhile sank by 59,000 barrels per day.
Brent crude futures have risen 20 percent in 2019 to around $63 a barrel, but most of that increase took place in early January. The WTI futures contract is down more than the Brent futures contract because of rising US supply and the possibility that the USA will not extend exemptions against the Iranian sanctions.
"Oil prices have not increased alarmingly because the market is still working off the surpluses built up in the second half of 2018", the IEA said.
Imports of crude oil from Venezuela are still a significant portion of the U.S. Gulf Coast imports, but they have been falling in recent years due to the collapsing Venezuelan oil production. In quality terms, it is more complicated.
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