- Venezuela has the largest proven oil reserves in the world.
- WTI prices still supported at 60 USD per barrel.
Crude oil is trading at about 61.16, up 0.39% on Thursday as the International Energy Agency (IEA) released its monthly report.
Venezuela is set to be the biggest risk factor among leading oil producers for a while, according to the latest report from the IEA.
"Within the OPEC countries, the biggest risk factor is, and will likely remain Venezuela. Without any compensatory change from other producers, it is possible that the Latin American country could be the final element that tips the market decisively into deficit." the IEA said in its report published on Thursday.
While Venezuela has the world's largest proven black gold reserves, its crude production has been declining at a steady pace in recent years as the country is struck by an economic crisis since several years.
Venezuela's crude output is expected to drop to 1.38mb/d by the end of 2018, according to the IEA. That would represent the lowest level of output in about 70 years.
The IEA revised its global oil demand to the upside forecasting to 99.3 mb/d in 2018. However, it warned that recent protectionist measures from the Trump administration could slow down global economic growth forecasts and as a consequence, hit trade flows and oil demand.
"A slowdown (in global trade) would have strong consequences, particularly for fuel used in the maritime sector and in the trucking industry," the IEA report said.
"The deepening unplanned decline in Venezuela knocked crude oil production 420,000 barrels per day below its OPEC target during February and helped boost OPEC's compliance with supply cuts to the highest ever," the report said.
OPEC's quota compliance jumped to 147 percent in February, though even without production declines in Caracas the OPEC's compliance would still be nearing close to 100 percent, according to the IEA's research.
At least eight OPEC countries have exceeded their compliance quotas in February, with Venezuela above the average to its highest level so far.
WTI daily chart
The technical picture is still a stalemate, neither buyers nor sellers are taking risks, preferring the certainty of the trading range. Crude is bouncing at the 60 level and is compressing in a triangle pattern. A break below 60 will likely lead to a test of 58 cyclical low while a break above the descending trendline might bring the price to revisit 64, last swing high and 66.60 the high for the year.
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