Oil prices near flat after reaching year's high

March 14 (UPI) -- Oil prices were near flat Thursday morning following an extension of Wednesday's gains based on an EIA report with a downward change in U.S. production projections, analysts said.

As of 6:40 a.m.West Texas Intermediate traded at $58.20 per barrel, or 0.1 percent lower, while Brent traded unchanged at $67.54 per barrel. Both had been slightly higher an hour earlier.

The Energy Information Administration report issued Wednesday contained favorable supply side news, independent analyst Lakshan De Silva told UPI.

The "EIA did a downward revision of U.S. crude oil production for 2019 to 12.3 million barrels per day and 2020 to 13.03 million barrels per day from an earlier level of 13.2million barrels per day," De Silva added.

"Additional positive sentiment for price came from the 6-day power cut in Venezuela, which curbed oil production by over 500,000 barrels per day," he said.

Venezuela, which in January produced just over 1.1 million barrels per day, has suffered a massive nationwide electricity blackout since last Thursday afternoon. The country is undergoing a political, foreign relations and economic crisis, and has dealt with U.S. sanctions since earlier this year.

"This comes in the back of Saudi Arabia's plan to reduce oil production to levels below 10 million barrels per day, and exports to under 7 million barrels per day," De Silva added.

OPEC plus, which includes OPEC members and some non-members, predominantly Russia, agreed on Dec. 7 to reduce production by 1.2 million barrels per day starting Jan. 1 in a bid to support higher price levels. Of that cut, 800,000 barrels corresponded to OPEC and 400,000 to the non-OPEC nations.

The most recent report issued by OPEC, on January production, indicated that OPEC had managed to achieve targeted reductions, thanks in part to unexpected disruption. The organization will publish its monthly report corresponding to February output later Thursday.

"With WTI and Brent crude oil hovering near their highs for the year, the upside momentum created by yesterday's bullish EIA report is likely to continue," James Hyerczyk, analyst at FxEmpire, wrote in a report.

"However, gains may be limited by concerns over weakening global demand, " Hyerczyk, added.

Traders and investors have consistently expressed in recent months increasing concern about a potential economic slowdown worldwide amid trade disputes between the world's two biggest economies, the U.S. and China. China is the world's biggest crude oil importer.

WTI closed Wednesday at $58.26 per barrel, its highest level so far this year. It has recovered from under $43 per barrel at Christmas last year, but is still well under the $86 per barrel reached on Oct. 3, the highest level for all of last year.

The WTI current price compares with $56.07 per barrel as recently as at the closing of Friday.

Similarly, Brent closed Wednesday at its highest for the year at $67.55 per barrel, a recovery from just over $50 per barrel in late December. Brent traded as high as $86 per barrel on Oct. 3.