Oil Slides on Disappointing U.S

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"It would seem that the market is really not too anxious yet about the potential loss of Venezuelan barrels", said analysts at JBC Energy in a report.

Output declines from the Organization of the Petroleum Exporting Countries (OPEC) as they make good on their pact to curb a supply overhang were compounded by falling U.S. oil rig counts and sanctions on Venezuelan oil sales.

Last week, the Energy Information Administration issued a bullish weekly report on US inventories after it revealed crude stockpiles rose by less than 1 million barrels last week, compared to expectations of a 3.1 million-barrel rise.

"We've been turning the heat up on the regime", Mnuchin said Wednesday, touting the effectiveness of fresh sanctions that President Donald Trump's administration imposed January 28.

Stocks gained by 1.3 million barrels in the week ended February 1, compared with analysts' expectations for an increase of 2.2 million barrels.

U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 1.27 percent, to settle at $54.56 a barrel.

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However, Turkey's Islamist president, Recep Erdogan, called the demand "a very serious mistake" and flatly told U.S. The report said that when US troops withdraw, it is "unclear what would occur with the Manbij agreement".

The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran a year ago, experts said after examining details posted by the Treasury Department.

Gasoline stocks increased by 513,000 barrels, less than anticipated, while distillate stockpiles posted a larger-than-expected drop by 2.3 million barrels. The daily average exports of crude oil over the past four weeks were about 2.5 million barrels, up by about 1 million barrels per day year-on-year. Venezuela, an OPEC member, is like Iran and Libya exempt from making voluntary curbs under the deal. Brent reached $63.63 a barrel, the highest since December 7, while WTI climbed to $55.75 a barrel, the strongest since November 21.

Also dampening market sentiment still were worries about weaker global economic growth and the US-China trade dispute.

WTI prices were $46.54 per barrel at the start of the year, rising to current levels in part on geopolitical concerns about Venezuela, as well as on the possibility of an economic slowdown in China. Oil prices fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.

The fund would receive income accrued by state-run oil firm PDVSA's U.S. unit Citgo Petroleum Corp since last month, when U.S. President Donald Trump recognized opposition leader Juan Guaido as Venezuela's legitimate head of state, Carlos Paparoni said in an interview. USA -imposed trade tariffs would be expanded in China by March unless trade talks advance.

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