Oil prices rose 2 percent on Wednesday after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production, but swelling us crude inventories led the market to pare gains.
Looking forward, oil could continue to rise, courtesy of falling OPEC and Venezuelan supplies.
Iran's crude oil production plunged to 2.754 million barrels per day (mb/d) in January 2019, about 1.064 million barrels per day less than in May 2018, when the United States withdrew from the 2015 nuclear agreement, OPEC said February 12.
The possible extension of the White House's March 1 deadline on tariffs increased investor optimism that the world's two largest economies can resolve their trade spat, boosting stocks around the world.
US crude inventory has been hovering between 430 and 450 million barrels since early December - and remains around 6% above the five year average for this time of year.
As of writing, Brent is trading at $63.06 per barrel, representing a 1 percent gain on the day.
The fact that top ranking officials were entering the negotiations "elevated the expectations a little higher" for a deal, Saal said.
Meanwhile, Barclays bank added, "Oil production is rapidly falling and companies that normally resell Venezuelan crude have not found ways to mitigate the effect of the USA sanctions".
"The potential for, maybe, an agreement between the USA and China has pushed prices higher", said Tom Saal, senior vice president at INTL FCStone in Miami.
"Oil markets continue to focus at the macro level on the dual notions of adequate supply and softening demand", Frank Verrastro, senior vice president for the Energy and National Security Program at the Center for Strategic and International Studies (CSIS), a US think-tank, said in a note.
Currently, Iran exports a little more than 1 mb/d of crude oil, less than a half of what it sold last May and the rest of its production is used domestically.
Refining profits for gasoline have plunged since mid-2018, going negative in Asia and Europe, amid tepid demand growth and a surge in supply.
Bank of America also warned of "a significant slowing in growth globally", adding that it expected Brent and WTI to average $70 per barrel and $59 per barrel respectively in 2019, and $65 per barrel and $60 per barrel in 2020. This article is strictly for informational purposes only. Leveraged trading is high risk and not suitable for all. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. He holds a BA in Economics from Rutgers University.