Oil prices spike by over 1% amid reports of the market flipping into deficit

International Brent crude futures were trading at US$48.50 per barrel, while U.S. West Texas Intermediate crude futures rose to US$46.8 a barrel. There has been a spike of over 1% in oil prices at the start of this week after Goldman Sachs said the market had ended almost two years of oversupply following global oil disruptions and flipped to a deficit, amid supply disruptions from Nigeria, Venezuela, the United States and China, as per Reuters. In Nigeria, oil major Exxon Mobil suspended exports from the country's biggest crude stream, Qua Iboe, and other producers have also suffered disruptions following acts of sabotage, reducing the country's output to its lowest in decades at around 1.65 mln bpd. In the Americas, major oil exporter Venezuela seemed on the brink of meltdown, triggering fears of default by its national oil company PDVSA, which has to make almost US$5 bln in bond payments this year. Venezuela's oil production has already fallen by at least 188,000 bpd since the start of the year as PDVSA struggles to make the investment needed to keep output steady. In the United States, crude production has fallen to 8.8 million bpd, 8.4 percent below 2015 peaks as the sector suffers a wave of bankruptcies. And in China, output fell 5.6 percent to 4.04 million bpd in April, compared with the same time last year.
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