LONDON: Oil prices held steady on Wednesday, boosted by concerns about supply disruptions following US sanctions on Venezuela’s oil industry but pegged back by a bleak outlook for the global economy.
US West Texas Intermediate (WTI) crude futures were at $53.34 per barrel at 0950 GMT, up 3 cents or 0.06 per cent.
International Brent crude oil futures were at $61.45 per barrel, up 13 cents or 0.21 per cent. Washington announced export sanctions against state-owned oil producer Petroleos de Venezuela SA (PDVSA) on Monday, limiting transactions between US companies that do business with the firm.
“The sanctions so far have been mostly disruptive for refiners on the US Gulf Coast, who are being forced to seek alternative heavy crude supplies, and have stepped up purchases from Canada,” said Vandana Hari of Vanda Insights, an energy consultancy.
The sanctions aim to freeze sale proceeds from PDVSA’s exports of roughly 500,000 barrels per day of crude to the United States.
World oil futures rose by more than 2 per cent on Tuesday, but the market has not seen panicked buying as a result of the US decision to target Venezuela’s oil output.
Its output was already near seven-decade lows and the sanctions affect Venezuelan supply only to the United States.
“The (Venezuelan) export volumes will not be eliminated from the market, but rather rerouted to other countries,” said Paola Rodriguez-Masiu, an analyst at consultancy Rystad Energy.
With the United States dropping out as a customer for Venezuelan oil, she added that “China and India… will be able to pick up these oil volumes at great discounts”. President Nicolas Maduro said he was ready for talks with the opposition although he ruled out snap elections the opposition is demanding. — Reuters
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