SINGAPORE (Reuters) – The oil markets fell on Friday, shrinking from an economic downturn, although supply cuts led by the producer club OPEC and US sanctions against Venezuela gave off with some support.
FILE PHOTO: An oil tanker is seen on the Jose Refinery's cargo terminal in Venezuela in this deprecated file image. REUTERS / Jorge Silva / Filfoto
U.S. The West Texas Intermediate (WTI) red futures stood at $ 52.20 a barrel with 0351
International Brent Crude futures were down 44 cents, or 0.7 percent, at $ 61.19 per barrel, having fallen 1.7 percent last session.
Roads on financial markets, including crude oil futures, were worried that US-China trade conflicts would remain unresolved denting global economic growth prospects.
US President Donald Trump said on Thursday that he was not going to meet Chinese President Xi Jinping before a March 1 deadline for the two countries to enter into a trade agreement.
If there is no agreement between the world's two largest economies, Trump has threatened to increase US tariffs on Chinese imports. Another round of negotiations is scheduled for next week in Beijing.
"The raw prices returned to the week's setback as slower growth prospects … could signal a return (for reasons) for the goods to rise," said market analyst Edward Moya to futures brokerage Oanda.
On Thursday, the European Commission reduced its economic growth forecasts in the euro area as it expects global trade tensions and a number of domestic challenges.
The Commission said growth this year will slow to 1.3 percent from 1.9 percent in 2018, before rising in 2020 to 1.6 percent.
Despite this, traders said that crude prices were prevented from falling further by supply cuts led by OPEC, which was adopted late last year to tighten the market and maintain prices.
As part of the cuts, Saudi Arabia – the world's largest raw exporter – said production in January with about 400,000 barrels per day (bpd) to 10,24 million bpd, according to OPEC sources.
That gives Saudi crude oil production nearly 1.7 million bpd under the US, which has knocked out around 11.9 million bpd in late 2018 and early 2019 – up more than 2 million bpd from the previous year.
Another risk of supply comes from Venezuela following the implementation of US sanctions against the OPEC member's petroleum industry at the end of January. Analysts expect this move to hit 300,000-500,000 bpd of exports.
Nevertheless, the impact of the sanction on international oil markets was limited.
"The general disturbance (Venezuela) seems to handle both the US and the global market," said Norbert Rücker, head of commodity research at the Swiss bank Julius Baer. "The oil market sits on a comfortable cushion of supply."  Reporting by Henning Gloystein; Editing by Kenneth Maxwell and Clarence Fernandez