Oil prices rose on Tuesday due to U.S. sanctions on Venezuela and OPEC production cut expected to tighten global supplies.
According to Reuters, U.S. West Texas Intermediate (WTI) crude futures were at $54.73 per barrel at 0020 GMT, up 16 cents from their last settlement. They closed 1.3 percent on Monday, after earlier touching their highest since Nov. 21 at $55.75 a barrel.
Analysts said that U.S. sanctions on Venezuela had focused market attention on tighter global supplies.
Venezuela’s oil transactions with other countries will likely face a sharp limitation due to the sanctions.
Saudi Arabia and its Gulf allies over-delivered on OPEC’s production cut deal causing a sharp fall in oil supply in January by the largest amount in two years.
Russia’s oil production already decreased by 47, 000 barrels per day in January from October as the country has kept to its pledge to gradually cut its oil production.
New orders for U.S.-made goods fell unexpectedly in November, with sharp declines in demand for machinery and electrical equipment, according to data released on Monday.
The global economic outlook and prospects for growth in fuel demand have also been clouded by poor economic data in China and U.S.-China trade tensions, CNBC has stated.