Higher American output is threatening to offset cuts by the Organization of Petroleum Exporting Countries and its allies. "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.
WTI prices were $46.54 per barrel at the start of the year, rising to current levels in part on geopolitical concerns about Venezuela, as well as on the possibility of an economic slowdown in China.
A decline in OPEC production and a squeeze on supply from Iran and Venezuela from US sanctions have led many analysts to forecast that the market will be balanced in 2019.
Following a US decision to impose sanctions on Venezuela's oil industry last week, Guaido and the Trump administration have sought to appoint a new board of directors for Citgo.
The key story supporting the market and driving the price action is the OPEC-led production cuts.
As of 7:35 a.m. EST, West Texas Intermediate front-month crude future prices fell 0.9 percent to $53.53 per barrel, while Brent future prices fell 0.5 percent to $62.36 per barrel as of the same time.More news: Apex Legends gains over a million players in under eight hours
"We expect the oil price to rise in the first-half of 2019 on tightening supply conditions and decline in the second-half on weakening economic activity and an increase in USA crude exports to global markets", said French bank BNP Paribas.
Further gains in the price of USA crude oil are possible as the recovery that began in late December a year ago shows no sign of reversing just yet.
Crude oil prices hit a 2019 high on Monday.
Venezuela, which produced 1.15 million barrels per day in December, was forced to look for alternative clients for its crude oil following sanctions that prevent the state oil company PDVSA from exporting to the USA unless the revenues are paid to opposition leader Juan Guaido. Meanwhile US WTI crude rose to $55.53.
Distillate fuel inventories last week shed 2.3 million barrels and production averaged 5.1 million barrels per day. They closed down 1.3 percent on Monday, after earlier touching their highest since November 21 at $55.75 a barrel. Both lines carry Canadian crude to the U.S. The surge comes shortly after Washington slapped sanctions on the Venezuelan state oil company PDVSA.
US President Donald Trump said in his State of the Union address that a trade deal was possible with China. The lender sees Venezuelan oil exports quickly falling by 300,000 barrels a day to about 700,000 barrels a day.