Global oil supply to swamp demand in 2019 despite output cuts - IEA

Global oil supply to swamp demand in 2019 despite output cuts - IEA

The IEA further added that traders shouldn't expect US sanctions against Venezuela to fuel a rally in oil prices.

"In terms of crude-oil quantity, markets may be able to adjust after initial logistical dislocations", said the Paris-based IEA, which advises major economies on energy policy.

U.S. WTI futures hit a high of $53.70 per barrel before receding slightly to $53.54 per barrel, a 0.83 percent rise, as of 2:04 p.m. HK/SIN.

OPEC production fell to a four-year low in January as the cartel applied a new pact to boost global oil prices, the International Energy Agency said Wednesday, but Russian Federation and other ex-Soviet states failed to cut back output as much as promised.

Growing U.S. supply and a potential economic slowdown this year could also cap oil markets.

Further, the Energy Information Administration (EIA) said that Venezuelan output slipped to 1.22 million barrels per day.

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USA sanctions on Venezuela's state-owned oil company are tightening the global oil market and sending refiners around the world scrambling to find replacements for the country's diesel-rich heavy and extra heavy crudes.

While global markets remain comfortably supplied, disruption in Venezuela poses a threat because production of the heavier, higher-sulfur crude it pumps is being reduced elsewhere, the IEA said in a monthly report.

Despite the political rifts between Venezuela and the United States, US refiners have in the past been some of the biggest buyers of Venezuelan crude.

Forecasts for non-OPEC supply were lifted by an improved outlook for the Gulf of Mexico, while projections for global demand were lowered as a result of weakness in Europe and the Americas. The group made a strong start to the strategy, slashing output by 930,000 bopd to the lowest in nearly four years, the IEA said.

The cartel's secondary sources showed on Tuesday that total OPEC production in January dropped by 797,000 bpd from December to average 30.81 million bpd. OPEC members (excluding Iran, Venezuela and Libya) are responsible for two thirds of production cut. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Elsewhere, the head of Russian oil giant Rosneft, Igor Sechin, has written to the Russian President Vladimir Putin saying Moscow's deal with the Organization of the Petroleum Exporting Countries (OPEC) to withhold output is a strategic threat and plays into the hands of the United States.

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