Venezuelan tumult lifts oil

Sydney/Singapore — Oil prices rose by more than 1% on Friday as turmoil in Venezuela triggered concerns that its oil exports could soon be disrupted.

Washington on Thursday signalled it could impose sanctions on Venezuela’s crude exports as Caracas descends further into political and economic turmoil.

International Brent crude oil futures were at $61.89 a barrel at 2.46am GMT, 80c, or 1.3%, above their last close.

US West Texas Intermediate (WTI) crude futures were at $53.90 a barrel, up 77c, or 1.5%.

Amid violent street protests, Venezuela’s opposition leader Juan Guaido declared himself interim president earlier this week, winning backing from Washington and large parts of Latin America, prompting Nicolas Maduro, the country’s leader since 2013, to break relations with the US.

Fundamentally, however, global oil markets are still well supplied, thanks in part to surging output in the US, where crude production rose by more than 2-million barrels a day in 2018 to a record 11.9-million barrels a day.

Record US production would likely offset any short-term disruptions to Venezuelan supply due to possible US sanctions, Britain’s Barclays on Thursday said in a note. The bank cut its 2019 average Brent crude oil forecast to $70 a barrel, down from $72 previously.

The surge in US output has resulted in swelling US fuel inventories.

Petrol stocks rose for an eighth consecutive week in the week to January 18, by 4.1-million barrels to a record 259.6-million barrels, the US Energy Information Administration (EIA) said in a weekly report on Thursday.

Crude inventories rose by 8-million barrels.

Reuters