Investing.com – Crude oil prices edged up in Asia on Thursday as investors saw a recent sell-off overdone and continued to monitor declining production from OPEC member Venezuela as it reels from a debt and inflation crisis.
On the New York Mercantile Exchange crude futures for December delivery inched up 0.02% to $55.34 a barrel, while on London’s Intercontinental Exchange, rose 0.10% to $61.94 a barrel.
Eurasia Group said that a default by Venezuela and its state-owned oil company remains highly likely.
“Predicting the precise timing of a default is difficult, as the government seems prepared to keep paying while it can,” Eurasia Group said in a report.
“But if talks falter and it becomes apparent that it doesn’t have options, the government’s calculations may end up being shaped by electoral timing. (President Nicholas) Maduro is considering moving up the presidential election (due by end-2018) to March of next year, and the debt service profile is relatively light before then (the government owes a total of $1 billion in the first quarter between PDVSA and the sovereign) with bulkier payments due in April, August, and October.”
Overnight, crude oil settled lower for the third day amid ongoing concerns over rising US output and build in crude stockpiles for the second week in row.
Inventories of rose by roughly 1.9 million barrels for the week ended Nov. 11, missing expectations of a draw of 2.2 barrels.
Gasoline inventories – one of the products that crude is refined into – rose by 894,000 barrels, confounding expectations for a draw of 919,000 barrels while supplies of distillate – the class of fuels that includes diesel and – fell by about 799,000 barrels, less than the expected decline of 1.3 million barrels.
The bearish data on refinery products such as gasoline and distillate come against the backdrop of an uptick in refinery activity as heating oil season gets underway.
Rising crude output, meanwhile, continued as preliminary U.S. production figures showed weekly output rose by 25,000 to an all-time high of 9.65 million barrels per day, the EIA said.
The uptick in US crude production added to recent fears that US producers are set to ramp up output after the IEA said on Tuesday that it expected global crude markets to remain oversupplied through the second quarter of 2018 amid an uptick in U.S. production.
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Source: Investing.com
