Oil rises on tighter supply but United States factory data weighs

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A day after the American Petroleum Institute disappointed oil bulls by reporting an estimated inventory build across the board, the Energy Information Administration deepened the mood by saying US crude oil inventories added 1.3 million barrels in the week to February 1.

Venezuela exports around 1 million barrels of oil per day, about 1 percent of global production, of which half heads to the United States.

U.S. sanctions on Venezuela's state oil company could also lift prices, though they have yet to trigger any sharp increase. The West Texas Intermediate (WTI) for March delivery erased 0.90 US dollar to settle at 53.66 dollars a barrel on the New York Mercantile Exchange.

Prices also dipped after data showed US crude inventories at Cushing, Oklahoma, the delivery point for USA crude futures, rose by more than 943,000 barrels in the week to February 1, traders said, citing data from market intelligence firm Genscape.

Supply cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, have been supporting prices.

U.S. West Texas Intermediate (WTI) crude futures were at $54.77 per barrel at 0223 GMT, up 21 cents or 0.4 percent.

Looking ahead, the EIA will also report on USA crude oil inventories later in the NA session along with extra publications in the United States docket.

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The official, who is also Venezuela's representative to OPEC, added that Caracas would do everything possible to minimise the effects of U.S. sanctions on the oil and gas giant on the market.

Despite hitting a 2-month high last week, crude oil prices have been chopping inside a tight range for several days as investors try to determine the key catalyst in the market at this time.

In an interview with Sputnik, Venezuela's National Representative to OPEC, the technical adviser at Venezuela's PDVSA company and Petroleum Ministry Ronny Romero spoke about the impact of the U.S. sanctions on the oil and gas giant.

"Despite several forays in WTI above our prior resistance of $55, the market continues to draft back down largely under the pressure of this week's stronger dollar", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

The oil market has also been aided by a slight pick-up in risk sentiment over the last month as US-China trade tensions are dialled down a touch.

U.S. President Donald Trump said in his State of the Union address that a trade deal was possible with China.

Senior US and Chinese officials are poised to start another round of trade talks next week.

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