Oil slips below $62 on rise in USA inventories

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Oil prices rose about 1 percent on Wednesday, boosted by signs of strong USA demand for distillate products and tightening global crude supply, but gains were capped by a rising US dollar and ongoing concerns about a global economic slowdown.

On average, however, analysts expected the EIA to report a rise of 3.7 million barrels in crude stockpiles for the week ended February 1, according to a survey conducted by S&P Global Platts.

Opec's sales to the world's biggest economy fell 22 per cent month-on-month and 37 per cent year on year, to 1.4m barrels per day, data from energy intelligence company Kpler shows.

Market participants have already been focused on signs of tightening global crude supply after the Organization of the Petroleum Exporting Countries (OPEC) and allies began an agreement in January to cut output.

Gasoline stocks increased by 513,000 barrels, less than anticipated, while distillate stockpiles fell a greater-than-expected 2.3 million barrels.

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

In an interview with Sputnik, Venezuela's National Representative to OPEC, the technical adviser at Venezuela's PDVSA company and Petroleum Ministry Ronny Romero spoke about the impact of the United States sanctions on the oil and gas giant.

While OPEC and allied producers are slashing their output in an attempt to boost crude prices, which saw a rapid fall previous year, the U.S. has been opposing the measure and vowed to continue expanding its supply.

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The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran a year ago, experts said after examining details posted by the Treasury Department.

OPEC and 10 partner producers outside the cartel agreed late past year to hold back crude output by 1.2 million barrels a day for the first half of 2019, in an effort to soak up a global supply glut and rebalance the market.

US sanctions on Venezuela's state oil company could also lift prices, though they have yet to trigger any sharp increase.

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.

WTI futures were up $0.46, or 0.84%, at $55.02 per barrel by 0940 GMT.

OPEC oil supply fell in January by the largest amount in two years despite sluggish production declines from Russian Federation, according to a Reuters survey.

US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.