HOUSTON: Oil prices edged marginally higher on Thursday as investors assessed the likelihood of further US sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers.
Brent crude was up 36 cents, or 0.6 percent, to USD60.04 per barrel at 12:11 p.m. ET (1711 GMT). US West Texas Intermediate crude was up 52 cents, or 0.9percent, at USD56.46 per barrel.
“Crude futures are trying to find support from the Venezuelan oil export blockade, which if it continues will likely cause production in the area to be shut in with no destinations to ship out to,” said Dennis Kissler, senior vice president of trading at BOK Financial. On Wednesday, Bloomberg reported that the US is preparing another round of sanctions on Russia’s energy sector in the event Moscow does not agree to a peace deal with Ukraine, citing people familiar with the matter.
A White House official told Reuters President Donald Trump had not made any decisions on Russian sanctions. “If no Russia/Ukraine peace deal is reached, the attacks on Russia could escalate, quickly tightening supplies, and if you add in the blockade on Venezuelan oil, crude prices may very well be a bit underpriced here,” Kissler said.
Further measures targeting Russian oil could pose a greater supply risk to the market than Trump’s announcement on Tuesday that the US would blockade tankers under sanctions entering and leaving Venezuela, ING analysts said in a note.
Britain imposed sanctions on 24 individuals and entities as part of its Russia sanctions regime, including on Russian oil companies Tatneft and Russneft, a government notice showed on Thursday.
The Venezuela blockade could affect 600,000 barrels per day of Venezuelan oil exports, mostly to China, but 160,000 bpd of exports to the US would likely continue, ING said. Chevron vessels were continuing to depart for the US under a previous authorisation from the US government.
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