The Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday that it had cut its output by nearly 800,000 bpd in January to 30.81 million bpd.
A general view shows Ras Tanura's oil production plant near Dammam in Saudi Arabia's eastern province.
On the broader picture, the ongoing OPEC+ agreement to curb oil production, USA sanctions against Venezuelan and Iranian oil exports and the so-called "Saudi Put" should keep a firm floor under crude prices. OPEC supply cuts, coupled with USA sanctions on Iran and Venezuela, have eased concerns of a glut.
The oil price has risen by 20 percent so far this year, yet most of that increase materialised in early January, before the imposition of U.S. sanctions on Venezuela's energy sector.
It also slightly downgraded its forecast for growth in global demand in 2019 from 1.29 million barrels per day to 1.24 million.
Venezuela accounted for 16 percent of OPEC output and 8 percent of world production in 1970 but those percentages had fallen to just 5 percent and 2 percent respectively by 2017 (https://tmsnrt.rs/2E4Pfb9).
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U.S. crude output is expected to grow by 1.45 million bpd this year and by another 790,000 bpd next year to hit 13 million bpd in 2020, according to the Energy Information Administration.
Oil production in Venezuela, which has been rocked by a crippling economic crisis, spiralling political turmoil and U.S. sanctions, meanwhile sank by 59,000 barrels per day.
Venezuela was once a major oil exporter to the United States, but shipments have fallen from 1.4 million bpd in 1998 to around 500,000 bpd in 2018 ("Petroleum supply monthly", EIA, Jan 2019).
The U.S. Treasury's guidance, which appears deliberately unclear, has left many third-country buyers uncertain about whether they can do business with PDVSA without also falling foul of sanctions.
"Some recent positive developments could support the global economy at its current level, including the recovery in oil prices, possible progress in U.S".
Global oil cartel Opec said Tuesday it sharply reduced crude oil production last month, after heavyweight Saudia Arabia slashed output and exports fell in crisis-hit Venezuela.
The sudden embargo on Venezuela's exports has therefore sent refiners in the United States and elsewhere scrambling to find alternative supplies compatible with their equipment.