Oil steady as U.S. gasoline glut offsets Venezuela turmoil

Oil prices were steady on Thursday after U.S. data showing record high gasoline inventories and an unexpected big build in crude offset the United States` threat of sanctions on OPEC member Venezuela.

Brent crude futures fell 18 cents to $60.96 a barrel by 11:23 a.m. EST (1623 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 24 cents to $52.86 a barrel.

U.S. crude inventories sharply rose by 8 million barrels last week, the Energy Information Administration said, versus forecasts of a decline of 42,000 barrels.

Gasoline stocks rose for the eighth straight week to a record 259.7 million barrels, as demand for the motor fuel over past four weeks fell 0.1 percent from year ago.

"The report was rather bearish, punctuated by the large crude oil inventory increase," said John Kilduff, partner at Again Capital Management. "Gasoline demand remains anemic."

Worries about the longer-term outlook for global economic growth, and therefore demand for crude, has been undermining bullish moves in the oil market. Persistent concerns about the U.S-China trade war as well as slower world growth forecasts have kept investors wary.NEW UPSIDE RISK

However, Brent earlier hit a session high on Thursday of $61.38 after the United States signaled that it could impose sanctions on Venezuela`s crude exports as Caracas descends further into political and economic turmoil.

Venezuelan oil is predominantly heavy crude, which requires extensive refining. It is frequently blended with lighter crudes to give refiners higher-value products.

With Iran already crippled by U.S. sanctions, a drop in Venezuelan exports could squeeze global supply further.

Geneva-based Petro-Logistics said on its website that Iranian crude and condensate exports in December "fell steeply" from November to less than 1 million barrels per day (bpd) due to U.S. sanctions - lower than some other estimates.

"The potential is that the U.S. is starting to put things in motion and the risk for an acceleration in the decline in production from Venezuela is increasing," Petromatrix strategist Olivier Jakob said. "This does provide a new upside risk for the market."

The Brent and U.S. West Texas Intermediate (WTI) contract are both backed by light, sweet crude, and are not directly linked to Venezuelan oil.

But concern about the supply of heavy crudes is apparent in the U.S. physical market, where the price for Mars Sour, a medium crude, shot to its highest since early 2011.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)