US crude rises 1.1%, settling at $53.69, boosted by concerns over Venezuelan crisis

Oil prices rose on Friday as political turmoil in Venezuela threatened to tighten crude supply, but concerns over surging U.S. fuel stocks and global economic woes weighed on sentiment.

The United States signaled on Thursday it may impose sanctions on Venezuelan exports after recognizing opposition leader Juan Guaido as interim president this week, prompting President Nicholas Maduro to cut ties with Washington.

But the ongoing U.S.-China trade dispute and broader gloom over world economic growth put a check on prices.

U.S. West Texas Intermediate crude futures ended Friday’s session 56 cents, or 1.1 percent, higher at $53.69 per barrel. WTI fell about 0.2 percent for the week, the first weekly decline in four weeks.

Brent crude oil futures were up 61 cents, or 1 percent, at $61.70 a barrel around 2:20 p.m. ET. Brent has shed about 1.6 percent since Monday and was also on track for its first week of losses in four weeks.

RBC Capital Markets predicted that U.S. sanctions could nearly double projected output shortfalls from Venezuela.

“Venezuelan production will decline by an additional 300,000-500,000 barrels per day this year, but such punitive measures could expand that outage by several hundred thousand barrels,” it said.

Still, some analysts said the possibility of immediate sanctions were unlikely.

“We view a blockade on Venezuelan imports as low probability and a last resort measure that is likely weeks if not months away should it materialize,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

“The evolving situation in Venezuela appears capable of delaying our expected test of $50 support.”

Global oil markets are still well supplied, however, thanks in part to a spike in U.S. output.

Source: CNBC