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Oil prices held steady on Wednesday. boosted by concerns about supply disruptions following U.S. sanctions on Venezuela’s oil industry but pegged back by a bleak outlook for the global economy.
U.S. West Texas Intermediate (WTI) crude futures were at $53.34 per barrel at 0950 GMT. up 3 cents or 0.06 percent.
International Brent crude oil futures were at $61.45 per barrel. up 13 cents or 0.21 percent.
Washington announced export sanctions against state-owned oil producer Petroleos de Venezuela SA (PDVSA) on Monday. limiting transactions between U.S. companies that do business with the firm.
“The sanctions so far have been mostly disruptive for refiners on the U.S. 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 percent on Tuesday. but the market has not seen panicked buying as a result of the U.S. 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“.
Venezuelan President Nicolas Maduro said on Wednesday he was ready for talks with the opposition although he ruled out snap elections the opposition is demanding.
Beyond Venezuela. analysts pointed to economic weakness as countering supply-side troubles.
World markets slip on China worries. dollar steady ahead of trade talks
“Another major risk event for the oil market will be U.S.-China trade talks which get underway today.“ said Stephen Brennock. analyst at London brokerage PVM Oil.
“Both sides are now faced with a now or never moment in settling their trade spat.“
Global economic growth is slowing amid a trade dispute between the United States and China. the world’s two biggest economies.
Officials from Washington and Beijing are set to launch a new round of trade talks on Wednesday. The two sides have slapped hefty import tariffs on each other’s goods.
