Oil rises toward $63 as OPEC cuts weighed against U.S. supplies

The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by nearly half since early 2005 to well below 2 million barrels per day, was "clearly vulnerable to an accelerated decline", and that such a disruption could tip global markets into deficit.

Saudi Arabia called the 2015 nuclear deal between Iran and world powers a "flawed agreement" on Monday, on the eve of a meeting between the Saudi crown prince and U.S. President Donald Trump.

Oil hit a six-week high on Wednesday, closing in on a 3-year peak set in late January, on a surprise decline in USA inventories, strong compliance on OPEC production cuts, and persistent concern related to the Iran nuclear deal.

"Tensions between Saudi Arabia and Iran gave prices some support", Sukrit Vijayakar, director of energy consultancy Trifecta, said in a note.

US West Texas Intermediate (WTI) crude futures were at US$62.02 (RM242.48) a barrel at 0145 GMT, down 32 cents, or 0.5 per cent, from their previous close. But with the hardening stance of the United States towards Iran, most investors were reluctant to sell oil aggressively.

Oil prices rose for a second day on Wednesday, at their highest, trading at six-week highs, on a surprise decline in USA crude inventories and as concern persisted over possible disruption to Middle East supply.

Oil has swung around this month after registering its worst February decline in half a decade as a global equity market rout spread to commodities.

Soaring US output, as well as rising output in Canada and Brazil, is undermining efforts by the Middle East dominated Organization of the Petroleum Exporting Countries to curb supplies and bolster prices.

While this may be music to the American ear, OPEC member countries and non-Member countries involved in the Declaration of Cooperation which caps oil production in countries that are party to the deal with the aim of stabilizing prices, will not share the enthusiasm.

Appetite for US crude is adding to the headache facing OPEC.

The market expectation was an increase of 2.6 million barrels in commercial crude stocks.

Up until the early 2000s, the US was Nigeria's top crude importer, buying around 700,000 bpd of the commodity and climbed as high as 1.31 million bpd in February 2006, according to the US Energy Information Administration. Brent is the benchmark for several Middle East and other global crudes.

The premium of Brent crude to WTI rose above $4 a barrel on Tuesday, its widest in a month.