From a fundamental perspective, the price is benefiting from data suggesting that supplies from the Organization of the Petroleum Exporting Countries fell by the most in two years last month, with Saudi Arabia leading the way.
Tuesday was also characterized with what is now a hallmark of trader behaviour: a partial mitigation of losses based on news that can hardly be qualified as good in the social sense of the word but nonetheless offsets worries about rising crude output and weakening demand, ie: the USA sanctions against Venezuela, which are putting a stranglehold on the Bolivian republic's troubled oil production sector. The government's official supply report is due later on Wednesday.
Oil prices have been on the rise since the US Treasury announced the seizure of $7 billion in assets of Venezuela's state oil firm PDVSA and its US subsidiary Citgo last week. The political crisis in Venezuela was part of the reason prices were rising in previous weeks, but this seems to have been priced in by now, said Fawad Razaqzada, market analyst at Forex.com.
An oil pumpjack and a tank with the corporate logo of state oil company PDVSA are seen in an oil facility in Lagunillas, Venezuela January 29, 2019.More news: Windies crush England in second Test to clinch series
Brent crude futures dropped 24 cents, or 0.38 percent, to settle at $62.51 a barrel.
"Because the number was a little disappointing, it played into the slowing demand scenario", said Phil Flynn, oil analyst at Price Futures Group in Chicago. The global benchmark crude was at an $8.36 premium to WTI for the same month.
Russia has been in full compliance with its pledge to gradually cut its oil production, Russian Energy Minister Alexander Novak said in a statement on Monday, adding that production fell by 47,000 barrels per day (bpd) in January from October.More news: Trump's Comments on Watching Iran from Iraq 'Humiliating' for Baghdad
The producers known as OPEC+ began cutting production by 1.2 million barrels per day from last month to avert a new supply glut and OPEC has delivered nearly three-quarters of its pledged cutback already, according to a Reuters survey.
Also dampening market sentiment still were worries about weaker global economic growth and the US-China trade dispute.
United States energy firms last week cut the number of oil rigs operating to their lowest in eight months as some drillers followed through on plans to spend less on new wells this year.
Traders are still anxious about the global economic slowdown especially because of the uncertainty surrounding the U.S.More news: Steve Smith could miss World Cup as ball-tampering ban faces delay