Oil prices edge higher amid concerns over global economy

Oil prices edge higher amid concerns over global economy

Stocks increased 1.3 million barrels in the week ended February 1, compared with analysts' expectations for an increase of 2.2 million barrels.

Also weighing on crude prices, the American Petroleum Institute said USA crude oil supplies rose by more than 2.5M barrels during last week, adding to the previous build.

Technically, crude oil managed to violate a sideways trading range of $54.90 - $53.50 to place a fresh low near $53.10.

A day after the American Petroleum Institute disappointed oil bulls by reporting an estimated inventory build across the board, the Energy Information Administration deepened the mood by saying US crude oil inventories added 1.3 million barrels in the week to February 1.

"The fact that USA crude oil and gasoline stocks rose more sharply than expected, as reported by the API after the close of trading yesterday, is weighing on prices", said Commerzbank analyst Carsten Fritsch. The sanctions aim to block US refiners from paying into PDVSA accounts controlled by Venezuelan President Nicolas Maduro.

International Brent crude oil futures on Monday were down 20 cents, or 0.32 percent at 0339 GMT to $62.54 a barrel, after closing up 3.14 percent in the previous session to their highest close since November 21.

Prices have been buoyed by a new round of supply cuts from the Organization of the Petroleum Exporting Countries and its allies that began in January.

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Inventory data from the Energy Information Administration will be released later today.

"Cutting out Venezuela from the global oil markets would provide a short term positive strength to oil prices, but its significance would be limited", said Mihir Kapadia, chief executive of Sun Global Investments.

"Basically it's a pretty supportive report", said Phil Flynn, oil analyst at Price Futures Group in Chicago.

Venezuela, like fellow OPEC members Iran and Libya, was exempt from production curbs under the deal on expectations that its output faced involuntary downward pressure in 2019.

In addition to other producers being able to pump more oil, the United States holds about 650 million barrels of crude in its Strategic Petroleum Reserve, which oil executives expect President Donald Trump would tap if prices spiked.

The global economic outlook and prospects for growth in fuel demand have been clouded by poor economic data in China and U.S. -China trade dispute. Oil prices fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

Senior US and Chinese officials are poised to start another round of trade talks next week.