By Florence Tan and Osamu Tsukimori
Falling production from Venezuela has contributed to a rally in global oil price Brent to nearly $80 a barrel. State firm PDVSA is considering declaring force majeure on some exports, three sources told Reuters, amid plummeting output from its oil fields and tanker bottlenecks at ports.
Brent crude rose 27 cents to $75.65 a barrel by 0412 GMT after dropping to its lowest since May 8 on Tuesday. U.S. West Texas Intermediate (WTI) crude futures were up 29 cents at $65.81 a barrel, having touched a near two-month low on Tuesday.
The Organization of the Petroleum Exporting Countries and Russia will meet on June 22-23 to decide how much production they will increase as global inventories have tightened while Venezuela's production has dropped more than expected. U.S. sanctions on Iran are also threatening to reduce oil exports from the OPEC producer.
The United States government has weighed in on the decision by putting in unofficial requests to Saudi Arabia and some other OPEC producers to increase output, sources said on Tuesday.
"At the moment, the oil price is being driven by OPEC and views on how much and how quickly OPEC plus will raise output," Energy Aspects analyst Virendra Chauhan said.
Reuters reported on May 25 that the producers were considering a supply increase of 1 million barrels per day, with a final decision to be made at the June meeting in Vienna.
WTI's discount to Brent narrowed 4 cents to $9.88 a barrel after industry data showed U.S. crude inventories fell by 2 million barrels, compared with analyst expectations for a decrease of 1.8 million barrels, American Petroleum Institute data showed.
Investors are waiting for the official inventories report to be issued by the U.S. Energy Department's Energy Information Administration at 1430 GMT.
(Reporting by Florence Tan in SINGAPORE and Osamu Tsukimori in TOKYO; Editing by Joseph Radford and Kenneth Maxwell)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)