SINGAPORE: Oil prices edged up in early trading on Monday as output falls in Nigeria and worries about political instability in Venezuela tightened the market, although rising OPEC output and a stronger dollar capped gains.
International Brent crude futures LCOc1 were trading at $48.11 per barrel at 0148 GMT, up 28 cents, or 0.6 percent, from their last settlement.
U.S. West Texas Intermediate crude futures CLc1 were up 25 cents, or 0.5 percent, at $46.46 a barrel.
Analysts said that falling supplies from producers such as Nigeria, the Americas and China had pushed up prices, although they added that increases elsewhere were capping gains.
“Oil struggled to hold gains from the previous day as the return of output from Canadian producers negated (production)losses,” said ANZ bank.
In Nigeria, oil major Exxon Mobil suspended exports from the country’s biggest crude stream, Qua Iboe, and other producers like Royal Dutch Shell and Chevron have also suffered disruptions following acts of sabotage, cutting output to its lowest in decades of around 1.65 million barrels per day.
In the Americas, major oil exporter Venezuela seemed to be on the brink of political and economic meltdown, triggering fears of default by its national oil company PDVSA, which has to make almost $5 billion in bond payments this year.
Venezuela’s oil production has already fallen by at least 188,000 bpd since the start of the year as PDVSA struggles to make the necessary investment to keep output steady.
Adding to these disruptions were the United States, where crude production C-OUT-T-EIA has fallen to 8.8 million bpd, 8.4 percent below 2015 peaks as the sector suffers a wave of debt-fuelled bankruptcies.
In China, Asia’s biggest oil producer and consumer, output fell 5.6 percent to 4.04 million bpd in April, compared with the same time last year.
Yet countering these disruptions was rising supply from the Organization of the Petroleum Exporting Countries (OPEC) following the lifting of sanctions against Iran which triggered a race for market share between Tehran and OPEC-rivals like Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.
OPEC pumped 32.44 million bpd in April, up 188,000 bpd from March. This is the highest since at least 2008, according to a Reuters review of past OPEC reports.
Also weighing on markets was recovering output in Canada following forced closures due to a wildfire, as well as a 3 percent rise in the dollar this month against other leading currencies. A firmer dollar makes dollar-traded fuel imports more expensive for countries using other currencies, potentially weighing on demand.