Oil rises 2% on Saudi Arabia, OPEC cuts

Just months earlier, they had relaxed production caps as prices shot higher on market worries about the impact of USA sanctions on Iran.

"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.

Companies added 7 oil rigs in the week to February 8, bringing the total count to 854, pointing to a further rise in United States crude production, which already stands at a record 11.9 million bpd.

The oil price may also have risen due to the news that Saudi Aramco, Saudi Arabia's largest oil company, will invest billions more in exploration of gas and oil outside its borders.

Analysts say a rise in oil prices is good for the country that sank into recession a year ago as a result of sharp dip in oil prices.

The cartel's scale-back was in line with an agreement by Opec and non-Opec members in December to trim production by 1.2 million barrels a day from January 1.

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"Crude oil quality is another issue, and, in the wider context of supply in the early part of 2019, it is even more important", the IEA said.

"Reports are emerging that PDVSA is scrambling to secure new markets for its crude, after the U.S. placed additional sanctions on the country", ANZ bank said on Monday. OPEC's share of that cut is 800,000 bpd.

Before U.S. sanctions came into force at the end of January, Washington shipped large amounts of naphtha to Venezuela.

In the two weeks since the sanctions were announced, Venezuela's crude exports have reportedly tapered off and shifted toward to cash-paying buyers - such as India.

It also slightly downgraded its forecast for growth in global demand in 2019 from 1.29 million barrels per day to 1.24 million. But a shortfall of heavy-sour crude can cause complications for many refiners, such as those along the U.S. Gulf Coast, configured to process it.

OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1 to prevent excess supply building up. In response to Maduro's call for aid, an OPEC spokesman familiar with the subject matter had been quoted saying that the Organization of the Petroleum Exporting Countries (OPEC), declined to make any formal statement and said that they were more concerned about their policies, not politics. The so-called OPEC+ alliance aims to prevent another price-crushing oil glut like the one that gripped the market between 2014 and 2016.

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