OPEC cut its production by almost 800,000 bpd to 30.81 million bpd in January. Credit: Maarten Heerlien.

Oil prices have risen as a result of the sanctions imposed by the US on Venezuela and after the Organization of the Petroleum Exporting Countries (OPEC) reported a reduced output last month.

International Brent crude futures rose 0.8% at $62.94 a barrel, while US West Texas Intermediate (WTI) crude oil futures were at $53.52 a barrel, an increase of 0.8%, Reuters reported.

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A report released by the American Petroleum Institute (API) has highlighted a drop in crude inventories by 998,000 barrels to 447.2 million in the week ending 8 February. This offered some support to oil prices.

“We see increasing risks that production losses could be larger and sooner than our forecast for a 0.33Mbpd supply loss in 2019.”

In January, OPEC reduced its production by almost 800,000bpd to 30.81Mbpd.

Prices further gained due to sanctions imposed by the US on Venezuela’s state-owned energy firm PDVSA, tightening supplies.

After Washington introduced petroleum export sanctions against Venezuela, the country is suffering a political and economic crisis.

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Goldman Sachs was quoted by the news agency as saying: “With so far no sign of change in government, we see increasing risks that production losses could be larger and sooner than our forecast for a 0.33Mbpd supply loss in 2019.”

Analysts said that global oil markets remain well supplied despite the supply cuts by OPEC and crisis in Venezuela.

For 2019 world economic growth, the oil cartel cut its forecast by 0.2% to 3.3%.

Center for Strategic and International Studies Energy and National Security Program senior vice-president Frank Verrastro said that markets were amply supplied due to ‘adequate global oil inventories, the prospect of weakened demand tied both to US-China trade and broader economic concerns, the approach of seasonal refinery maintenance – when crude oil demand declines – and an influx of new supply from the US and elsewhere’.

The Energy Information Administration said that US crude production is expected to reach 13.2Mbpd by 2020.