Oil rises in New York after jumping the most in more than a week on concerns that U.S. sanctions on Venezuela will pose significant market disruption.
West Texas Intermediate futures rose 0.8 percent after climbing 2.5 percent on Tuesday. Venezuela is considering declaring force majeure with the U.S., a signal it may halt shipments, after the White House effectively banned American companies from purchasing its crude. A ban would mean that the 500,000 barrels shipped to the U.S. every day by the OPEC member would need to be re-directed elsewhere, Societe Generale SA said.
Oil is trading in its tightest range in four months as the Organization of Petroleum Exporting Countries and its allies trim output to fight a global glut driven by record U.S. production. The crisis in Venezuela has so far had only a limited impact on prices as it doesn’t change the overall supply and demand picture. Restoring the country’s output could take years, according to Jeff Currie, head of commodities research at Goldman Sachs Group Inc.
West Texas Intermediate crude for March delivery rose 40 cents to $53.71 a barrel on the New York Mercantile Exchange at 11:02 a.m. in London. The contract climbed $1.32, or 2.5 percent, to close at $53.31 a barrel on Tuesday, the biggest advance since Jan. 18.
Brent for March settlement was 51 cents higher at $61.84 a barrel on the London-based ICE Futures Europe exchange. The contract increased $1.39 to $61.32 in the previous session. The global benchmark crude was at a $8.8 premium to WTI.
Source : Bloomberg