Oil prices rise as Venezuelan woes continue and Trump seeks spike
Chronic economic meltdown in Venezuela helps fan moderate gains in oil price as OPEC weighs likely production increase.
Oil prices rose slightly in early trading on Wednesday as the output crisis in Venezuela worsened, according to Reuters.
State firm PDVSA may shortly declare force majeure on some exports, un-named sources told Reuters, due to falling production from its oilfields and tanker bottlenecks at ports.
Brent crude is trading at $75.7 a barrel, a lift of 27 cents following the news, while light, sweet West Texas Intermediate is trading at $65.8 a barrel, a spike of 29 cents.
Price rises have been clipped due to the imminent prospect of leading producers Saudi Arabia and Russia deciding to end the cutbacks that have been on-going since late 2016. At present, the output of a cartel of 24 nations, including all members of the Organisation of the Petroleum Exporting Countries (OPEC), has scaled back supply by 1.8mn barrels per day.
OPEC is scheduled to hold a meeting with Russia at its Vienna headquarters later this month and it is thought a rise in production is likely to follow. The situation in Venezuela, the prospect of sanctions on Iran later in the year and success for the group in draining global inventories to below five-year averages are the main factors for the potential output boost.
Meanwhile, news agencies are reporting that US President Donald Trump has used back channels to request Saudi Arabia and other OPEC members to raise production by 1mn barrels per day as gasoline prices in America hit three-year highs.