The OPEC with its allies has curbed production since January 2017 to get rid of a supply glut that in mid-2014 led to a price collapse.
He also reiterated that obligations under the 1.8 million b/d OPEC/non-OPEC output cut agreement may be lowered if the participants come to the conclusion at the June meeting the market has rebalanced.
The sudden consideration comes in response to rising oil prices that are pushing toward three-year highs and are beginning to drag on consumers. The price of a barrel of Brent crude was down by more than 1.6 per cent to $78.22 at one point yesterday. USA crude added 24 to $72.48 per barrel and Brent rose 17 cents to $79.33 on Monday (May 22).
In April, Valero received 13 cargoes of Venezuelan crude for its U.S. Gulf refineries compared with nine cargoes imported by Citgo Petroleum, according to the Reuters data.
Saudi Arabia and other major OPEC producers could in theory add more supply, but have yet to do so. State refiners that control more than 90 percent of the retail market, didn't raise gasoline and diesel prices for almost three weeks ahead of the elections in Karnataka. "With the Saudis now saying they're limiting their production cuts and geopolitical risk already priced in, there is going to be some uncertainty".
WTI is shedding further ground today after the EIA reported on Wednesday that United States crude oil supplies unexpectedly rose by nearly 5.8 mbpd during the week ended on May 18, while USA oil production stayed at all-time highs beyond 10.70 mbpd.
The US is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades.
Natixis, a London-based commodity research house, says: "Due to sanctions, Iran's 2.5-300,000 barrels a day of export will not happen, which Opec (the petro exporting nations' cartel) members are likely to replace".
Meanwhile, commercial USA crude inventories rose C-STK-T-EIA by 5.8 million barrels in the week to May 18, beating analyst expectations for a drop of 1.6 million barrels, the Energy Information Administration (EIA) said on Wednesday.