Venezuela's oil output has always been on a downward spiral thanks to years of underinvestment and mismanagement, with stepped-up U.S. sanctions further trimming exports.
International Brent crude oil futures marked a 2019-peak of $67.80 per barrel in Asian morning hours.
"With OPEC's cuts in full-swing ... persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported", said Jasper Lawler, head of research at futures brokerage London Capital Group. Market shortages have been exacerbated by United States sanctions on oil exports by OPEC members Iran and Venezuela.
While Friday put an end to crude's daily winning streak due to a return of fears that the global economy will weaken and American production is skyrocketing, US oil ended the week 4.1 percent higher, and Brent was up 1.9 percent.
As stated by Per Magnus Nysveen, one of the partners at Rystad Energy, with the increase in USA oil and gas exports, the US trade deficit will vanish and its foreign debts will be quickly paid, emphasizing that USA exports increased by 2 million barrels a day last year and that they will surpass that of Saudi Arabia's this year by growing by 1 million barrels a day this year. "As it happens, 1.2 million bpd is also the size of the output cuts agreed by OPEC countries and some non-OPEC producers".
Venezuela produces about 1.2 million barrels of oil a day when operating normally, said the IEA.
Forecasts slowed USA production to a record of 13 million barrels per day (bps) until the third quarter of 2020, instead of the second quarter of previous forecasts.More news: Borough MP resigns junior shadow minister role over Brexit second referendum vote
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According to the IEA's report, this means for OPEC that not only it has lost its once biggest customer, but also that, with the rise of shale oil in the US, it will continue to lose its power in the global energy market until the mid-2020s.
Even though media headlines pegged the agency as being concerned that the Bolivian republic's recent electricity crisis could trigger "serious disruption" to the oil market, the IEA pointed out that the Organization of the Petroleum Exporting Countries (OPEC) was sitting on 2.8 million bpd of spare production capacity, and "Therefore, in the event of a major loss of supply from Venezuela, the potential means of avoiding serious disruption to the oil market is theoretically at hand".
An unexpected dip in United States crude oil inventories and production also lifted prices, traders said.
Crude inventories dropped by 3.9 million barrels in the last week, to 449.07 million barrels, compared with analyst expectations for an increase of 2.7 million barrels.
Raw stocks at the Kacheng delivery office in Oklahoma fell by 1.1 million barrels, the institute said.
In China, official statistics showed refinery crude oil use hit a record.
Wednesday's weekly EIA report for the week-ending March 8 showed US commercial crude oil inventories fell as refineries hiked output.