Oil hits 3-week high ahead of US inventories data

Oil prices continued to rise as the US market opened on Wednesday. after hitting a three-week earlier in European trade, as the US crude resumed its rally after pausing yesterday, and Brent crude extended its gains for the seventh straight day, after data showed that the coronavirus spread is slowing down, in addition to new US sanctions on Venezuelan oil supply, while the API will release its preliminary data on US crude inventories later today.

The US crude rose to the highest since Jan. 31 at $52.91 a barrel, after opening at $52.11, and Brent crude also rose to highest since Jan. 31 at $58.66, after opening at $57.67.

US crude fell by 0.4% yesterday, to post its first loss in 3 days, while Brent futures gained 0.25%, posting the sixth straight daily gain.

China revealed that the numbers of infected cases of the coronavirus have fallen for the second straight day, boosting hopes about the Chinese government's ability to contain the virus spread, which has sharply impacted the Chinese economy and hit its demand for oil.

The Chinese authorities are struggling to resume the country's industrial activities, after a lockdown on major cities to contain the virus outbreak, which its death toll reach more than 2000 victims.

The US yesterday imposed sanctions on subsidiary of the Russian state oil company, Rosneft, due to its ties to Venezuelan President Nicolas Maduro and Venezuelan oil companies.

Rosneft Trading is the main supplier for the Venezuelan crude to Asia, especially to India and China.

The Libyan National Oil Corporation unveiled today that Libya's oil output fell to 123 thousand barrels per day in February vs 1.2 million bpd before Haftar forces sieged the ports in mid-January.

The American Petroleum Institute (API) will release later today its preliminary data on US crude inventories, with forecasts for inventories to rise for the third straight week, and the US Energy Information Administration will release the official report tomorrow.