Oil stable as economic outlook weighs, Venezuela concerns support

By Henning Gloystein SINGAPORE (Reuters) - 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.

Reuters January 30, 2019 07:05:22 IST
Oil stable as economic outlook weighs, Venezuela concerns support

Oil stable as economic outlook weighs Venezuela concerns support

By Henning Gloystein

SINGAPORE (Reuters) - 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.

(Reporting by Henning Gloystein; Editing by Joseph Radford)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.