The North American benchmark WTI and the North Sea benchmark Brent have continued to push higher despite bearish news hitting the market and inventories remaining higher than anticipated. WTI crude is currently trading at $47.3 per barrel and Brent at $2.4 per barrel premium to WTI. Despite the bearish news hitting the market, the political situation in Venezuela which might see the supply suddenly crumble by more than 1.8 million barrels per day is fuelling the price higher. Here are the key factors that are currently at play in the oil market

• Inventories: Despite a decline in this year’s OECD inventories, the amounts of crude oil stored remains 266 million barrels higher than the five-year average.
• US production: Despite oil price hovering below $50 per barrel, the oil, production has continued to recover in the United States. The production currently stands at 9.43 million barrels per day, up more than a million barrels per day from bottom in July 2016 and up 732,000 barrels per day this year.
• Libya and Nigeria: These two countries which have exempted from OPEC deal have been leading the production increase within OPEC. In last two months, production from OPEC increased by 759,000 barrels. These two countries shared 537,000 barrels of the increase in the past two months.
• Unraveling OPEC deal: Ecuador became the first country to opt out from the OPEC agreement to cut supplies by 1.76 million barrels per day.
• Qatar crisis: Saudi-led Gulf nations’ blockade of Qatar is likely to continue and the crisis risks the further unraveling of the OPEC agreement.
• Chinese demand: China growth has beaten expectations as the economy grew by 6.9 percent in the second quarter. China’s increased crude demand, which is up more than 14 percent is one of the factors behind the strength in prices.
• Natural gas: Natural gas would continue to challenge oil’s position as a dominant energy source as the use of gas moves up over the coming years.
• Venezuela crisis: Political crisis in Venezuela risks curbing supplies from that country in the tune of 1.9 million barrels per day.