Oil prices have declined due to a hike in the US crude stockpiles and a proposed investment to suspend decreasing oil production in Venezuela.
Benchmark Brent crude oil futures LCOc1 went down 26 cents, or 0.3%, trading at $75.69 a barrel, while US West Texas Intermediate (WTI) crude futures CLc1 dipped 12 cents, or 0.2%, to stand at $68.41, Reuters reported.
According to the American Petroleum Institute, US crude inventories increased 38,000 barrels to 405.7 million barrels last week.
Oil consultancy Trifecta director Sukrit Vijayakar was quoted by the news agency as saying: “The API reported surprisingly flat numbers to a market expecting a reasonable draw in crude and a build in products.”
Traders said that oil markets were also pulled down by reports of potential investment to enhance oil production in Venezuela.
The country is reeling under an economic crisis, which has resulted in crude exports halving since 2016 to less than one million barrels per day (bpd).
State-run oil firm PDVSA has reportedly reached a $430m investment deal to increase production by 640,000bpd across 14 oil fields.
However, analysts expressed their doubts over the deal given the political and economic uncertainty in the country.
Bank of America Merrill Lynch stated that global supply could witness a hike towards the end of the year, notwithstanding supply risks from Venezuela, Iran, Libya and Nigeria.
The bank said: “Heading into Q418, we expect rising non-OPEC oil production as supply outages abate and greenfield projects ramp up.
“Currently, non-OPEC supply outages are at a 15-month high of 730,000bpd. However, nearly half of these volumes are in the process of being restored.”
Supply increases are also expected due to new production in Canada, Brazil and the US.
Traders opined that crude markets remained relatively tight, largely due to the potential impact of impending US sanctions against Iran.