Helping to underpin prices are the OPEC-led supply cuts and Washington's sanctions against Venezuelan crude exports.
"The collapse in oil prices late a year ago has resulted in more cautious spending by USA oil explorers", said Dhar. -China trade deal. An economic slowdown in the Euro Zone is now a concerns after German industrial output unexpectedly fell in December for the fourth consecutive month.
"It would seem that the market is really not too anxious yet about the potential loss of Venezuelan barrels", said analysts at JBC Energy in a report.
Venezuela's oil exports fell to a 10-month low in January following new sanctions on the nation's state-owned oil company Petroleos de Venezuela SA that effectively block Maduro's regime from exporting crude to the U.S. That's down from 10.643 million bpd in December, representing a cut that was 70,000 bpd deeper than targeted under the OPEC-led pact to balance the market and support prices.
US West Texas Intermediate (WTI) crude futures gained 43 cents, or 0.8 percent, to $54.09 a barrel after posting a session low of $52.86 a barrel.
"The fact that US crude oil and gasoline stocks rose more sharply than expected, as reported by the API after the close of trading yesterday, is weighing on prices", said Carsten Fritsch, an analyst at Commerzbank.
Crude oil prices hit a 2019 high on Monday.
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"Despite several forays in WTI above our prior resistance of $55, the market continues to draft back down largely under the pressure of this week's stronger dollar", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
The sanctions will limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran previous year, some analysts said after examining details announced by the US government.
U.S. distillate stocks fell by 2.3 million barrels, while inventories of other refined fuels dropped by 2.9 million barrels. They closed down 1.3 percent on Monday, after earlier touching their highest since November 21 at $55.75 a barrel. The sanctions aim to block USA refiners from paying into PDVSA accounts controlled by Venezuelan President Nicolas Maduro.
Brent crude, the global benchmark, slipped 49 cents to $61.49 a barrel as of 1053 GMT.
Market participants are also watching for developments surrounding the U.S.
In his State of the Union address, U.S. President Donald Trump said a trade deal was possible with China. "Around a third of Venezuela's exports head to the United States, as such, we expect Venezuelan exports to quickly fall by 300,000 barrels per day (bpd) to around 700,000 bpd", ANZ bank said on Thursday.
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