Oil stable as economic outlook weighs, Venezuela concerns support
Oil prices were stable on Tuesday, pressured by a cloudy outlook for the global economy but supported by worries over disruptions to supply from U.S. sanctions on Venezuelan exports.
Oil prices were stable on Tuesday, pressured by a cloudy outlook for the global economy but supported by worries over disruptions to supply from U.S. sanctions on Venezuelan exports.
U.S. West Texas Intermediate (WTI) crude futures were at $53.28 per barrel at 0111 GMT, 3 cents below their last settlement.
International Brent crude oil futures were 1 cent above their last close, at $61.33 per barrel.
This followed a 2-percent price jump the previous session, when markets first digested the U.S. sanctions on Venezuela`s oil exports.
Washington on Monday announced export sanctions against Venezuela`s state-owned oil firm PDVSA, limiting transactions between U.S. companies that do business with Venezuela through purchases of crude oil and sales of refined products.
The sanctions, aim to freeze sale proceeds from PDVSA`s exports of roughly 500,000 barrels per day (bpd) of crude oil to the United States. They are the toughest U.S. financial challenge yet to Venezuela`s embattled socialist president, Nicolas Maduro.
The step pushed up oil prices on Monday, but markets appeared more relaxed on Tuesday as the sanctions only impact Venezuelan supply 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".
Other analysts also pointed to global economic weakness as countering supply-side concerns such as the voluntary supply restraint by the Organization of the Petroleum Exporting Countries (OPEC), which started late last year in a bid to tighten the market and prop up prices.
"The Venezuelan political crisis, as well as a Saudi pledge to lower output further, should have boosted crude oil, but pulling in the opposite direction are heightened concerns about global growth, particularly that of China," said Ole Hansen, head of commodity strategy at Denmark`s Saxo Bank.
Global economic growth and fuel consumption are expected to slow this year amid a trade dispute between the United States and China, the world`s two biggest economies.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
PM Modi has invested in this post office scheme; know his total worth as per Lok Sabha elections 2024 affidavit
SRH vs GT IPL 2024 Ticket Booking Online: Where and how to buy SRH vs GT tickets online - Check IPL Match 66 ticket price, other details
Top 7 SWP Mutual Funds: Rs 50 lakh investment, Rs 70K monthly pension for 10 years, and Rs 42.30 lakh balance value; know more details
Gold and Silver rate today (May 13, 2024): Precious metal under pressure; yellow metal near Rs 72,400, white metal above Rs 84,600
SIP Returns: How Rs 3,000, 5,000, and Rs 10,000 SIPs can help you build retirement corpus of Rs 1.06 cr, Rs 1.77 cr, and Rs 3.53 cr
TBO Tek IPO Listing LIVE Update: Bumper Debut! Share list at 55% premium - Buy, sell or hold? Check Anil Singhvi's view
07:48 AM IST