By Stephanie Kelly
NEW YORK (Reuters) - U.S. oil prices rose by about 1 percent on Thursday, boosted by the U.S. threat of sanctions on Venezuela, but gains were capped by record high gasoline inventories and an unexpected big build in crude stocks in the United States, the world's top oil consumer.
U.S. West Texas Intermediate (WTI) crude
Washington signalled it could impose sanctions on Venezuela's crude exports as Caracas descends further into political and economic turmoil. The threat to reduce supplies supported futures prices.
The United States, the top importer of Venezuelan crude, is seeking to ensure that the OPEC member's oil revenue goes to opposition leader Juan Guaido, who swore himself in as interim president, and to cut off money from President Nicolas Maduro, a top U.S. official said on Thursday.
"The market is really concerned about the geopolitical factors and what will happen if there are sanctions on Venezuela," said Phil Flynn, an analyst at Price Futures Group in Chicago.
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.
Both Brent and WTI are both backed by light, sweet crudes, 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
ANEMIC U.S. GASOLINE DEMAND
Weighing on oil futures, U.S. crude inventories
"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 pressured oil prices. Persistent concerns about the U.S-China trade war as well as slower world growth forecasts have kept investors wary.
For graphic on World economic growth and oil demand, click https://tmsnrt.rs/2S3IC0h
(Additional reporting by Amanda Cooper in London and Koustav Samanta in Singapore and Colin Packham in Sydney; Editing by Marguerita Choy and Edmund Blair)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Jan 25, 2019 01:05:37 IST