Feb. 20 (UPI) -- Crude oil prices fell early Wednesday partly due to concerns about increasing United States production, but investors were alert to developments in Venezuela, where a political and economic crisis threatens oil infrastructure.
West Texas Intermediate front-month crude futures fell as of 8:58 a.m. EST by 0.7 percent to $56.03 per barrel while Brent crude futures traded 0.9 percent lower at $65.86 per barrel.
WTI climbed in the seven preceding sessions to close Tuesday at $56.45 per barrel, its highest level for the year. Brent closed Tuesday slightly lower, after gains in the six preceding sessions.
"Some of the pullback can be attributed to a report from the EIA, which showed that U.S. oil supply from several key shale regions is expected to increase by 84,000 barrel per day to 8.397 million barrels per day, reaching a new record," Justin McQueen, DailyFX analyst, told UPI.
Given the Presidents' Day holiday in the U.S. on Monday, investors will only see the American Petroleum Institute report Wednesday night. The Energy Information Administration's report will follow on Thursday.
On Tuesday "prices jumped after the report of a fire at a crude oil pumping station in Venezuela's Orinoco belt region," FXEmpire analyst James Hyerczyk said in a report. The analyst added that Venezuela's state-run oil company PDVSA blamed the blaze on right-wing saboteurs.
"Underpinning prices were the OPEC-led production cuts and the U.S. sanctions on Iran and Venezuela. Prices were capped by soaring U.S. production and concerns over the slowing global economy," he added.
Concerns about potential supply disruptions in Venezuela, a country going through a deep political and economic crisis, have contributed to rising oil prices this year. Venezuela produces 1.15 million barrels per day.
Part of the gains in crude prices that contributed to the recent winning streaks has to do with U.S. sanctions on Venezuelan oil. The penalties mandate that no revenue from Venezuelan oil should reach the country's president, Nicolas Maduro.
"Since Venezuela is a hot spot, traders should continue to watch for similar news that affects supply," Hyerczyk added.
Brent futures traded at over $86 per barrel on Oct. 3, when WTI traded at over $76 per barrel, both at their peaks for 2018.
Crude oil futures started a climb after May 2018 when United States President Donald Trump announced nuclear-related sanctions against Iran.
But on Nov. 5, Trump announced the availability of waivers to buyers of Iranian oil, prompting analysts to change their chief concerns from supply disruptions to an oversupplied market. This led to a declining trend in the last quarter of last year.
On Dec. 7, OPEC and some non-OPEC countries agreed to work together to reduce production by 1.2 million barrels per day in a bid to help prices recover.
The cuts came into effect in January, which saw crude prices recover from lows around the Christmas-shortened trading week, when Brent traded just over $50 per barrel.