Oil ticks higher, market eyes US State of the Union address

Oil ticks higher, market eyes US State of the Union address

Oil companies still scrambling to find alternative supplies of heavy crude - and raising the specter of production cuts - have privately argued the administration has not found the right balance nor approved options that would help relieve pressure on refineries.

USA sanctions on Venezuela's state oil company could also lift prices, though they have yet to trigger any sharp increase. Brent crude, the global benchmark, slipped 4 cents to $61.94 a barrel by 1331 GMT.

The Bloomberg Dollar Spot index has risen 1 percent this month, capping gains in crude and other commodities priced in the currency.

"The collapse in oil prices late past year has resulted in more cautious spending by United States oil explorers", said Dhar.

On Wednesday, the EIA reported that for the week ended February 1 that USA commercial crude oil inventories increased by 1.3 million barrels from the previous week.

United States crude oil inventories climbed by 1.3 million barrels in the week that ended February 1 to 447.21 million barrels, data from the Energy Information Administration (EIA) showed on Wednesday.

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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US West Texas Intermediate (WTI) futures were at $55.13 per barrel, down 13 cents, or 0.24 percent, from their last settlement.

US inventories of winter fuels, including propane, shrank by about 4.9 million barrels combined last week, EIA data showed Wednesday. Elsewhere, supplies from OPEC face heightened uncertainty after Libya's eastern leader Khalifa Haftar said his forces have taken control of the country's largest oil field.

Russia has been in full compliance with its pledge to gradually cut its oil production, Russian Energy Minister Alexander Novak said in a statement on Monday, adding that production fell by 47,000 barrels per day (bpd) in January from October.

Citgo, the eighth-largest US refiner and Venezuela's top foreign asset, is in the middle of a tug of war as the Trump administration has made aggressive moves to remove it from Maduro's control.

-China trade war, which has dragged on world markets as investors worry that the dispute could contribute to a potential global economic slowdown. Oil fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

Analysts said that US sanctions on Venezuela had focused market attention on tighter global supplies.

Trump has vowed to increase US tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent now if the two sides can not reach a deal by March 1.

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