Oil up on Venezuela sanctions

london - Analysts say global oil supply ample despite sanctions

Oil prices rose on Tuesday after Washington imposed sanctions on state-owned Venezuelan oil company PDVSA in a move likely to curb the Opec member's crude exports, but gains were capped by abundant supply and signs of a slowing Chinese economy.

The upward momentum in the global benchmarks gathered pace in afternoon trading. International Brent crude oil futures were up $1.31 at $61.24 a barrel by 1438 GMT and on track for its biggest monthly rise since April 2016.

US West Texas Intermediate (WTI) crude futures were up $1.32 at $53.31.

Venezuela has the world's biggest proven oil reserves, but its potential has not been realised fully because of a lack of investment.

"The Latin American country is predominantly the producer of heavier crude, exactly what [US Gulf] refiners are thirsty for," PVM said in a note.

"They will now have to turn elsewhere [possibly to Mexico, Saudi Arabia and Iraq] to satisfy their needs for this type of crude, which would inevitably lead to a price spike."

Venezuela's exports fell to little more than 1 million barrels per day (bpd) in 2018 from 1.6 million bpd in 2017, according to Refinitiv ship-tracking data and other trade sources. - Reuters