Venezuela chaos: Oil prices inch up with rising turmoil

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Brent for March settlement advanced 46 cents to $61.55/bbl on the London-based ICE Futures Europe exchange, and traded at a $7.89 premium to WTI.

However, fresh data on surging US fuel stocks and worries about U.S. Earlier in the week, the EIA reported U.S. crude oil supplies rose nearly 8M barrels during the week ended on January 18.

Oil prices were pressured by a weekly report from the American Petroleum Institute (API) that said USA crude inventories rose by 5.4 million barrels in the week to November 30, to 448 million barrels, in a sign that us oil markets are in a growing glut.

World leaders and top executives are meanwhile meeting in Davos, Switzerland, to discuss how to steer policy amid worries of slowing economic growth, damaging trade wars and Brexit. Brent has shed about 2.9% since the start of trade on Monday and is on track to post its first week of losses in four weeks.

In Caracas, Venezuelan President Nicolas Maduro and Juan Guaido, the opposition leader, gave dueling speeches.

Oil prices fell slightly during the week ending January 25, with the price of West Texas Intermediate (WTI) for March delivery down by 0.2 percent and Brent crude for March delivery down by 1.7 percent. The issues in the country have also put Washington and Moscow on edge with Russian Federation warning the United States not to intervene.

On Thursday, oil prices were mixed as traders looked to the possibility of USA sanctions on Venezuelan oil sector and a weekly surge in US crude stockpiles.

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RBC Europe predicted that sanctions could almost double projected output shortfalls from the troubled exporter.

Bloomberg television looked at Venezuela another way: when asked if a change of government would enable the country to get more rigs back on line and therefore cause crude prices to drop, Liam Denning, a Bloomberg Opinion columnist, pointed out that even if the sanctions weren't imposed and the country underwent a smooth transition to a new government, it would take a long time for oil production to fully recover.

Sanctions could also include USA exports of petroleum products to Venezuela that are used for blending with Venezuelan heavy crude.

Global oil markets are still well supplied, however, thanks in part to surging output in the U.S.

The bank said it expected Brent and WTI prices to average $70 and $59 per barrel respectively in 2019.

Over the past four weeks, US total oil products imports averaged about 1.98 million barrels per day, up by 94,500 barrels per day from the same four-week period previous year.

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