Oil prices increase due to US sanctions on Venezuela

Oil prices have increased 1% after US imposed sanctions on Venezuela’s oil firm Petroleos de Venezuela (PDVSA), which may distract supplies.

International Brent crude oil futures were up 61 cents at $61.93 a barrel, while US West Texas Intermediate (WTI) crude futures rose 52 cents and were at $53.83 a barrel, Reuters reported.

Export sanctions were announced against the oil producer in Venezuela, restricting deals between the US companies that do business with the firm.

Venezuelan President Nicolas Maduro said that he was ready to discuss with the opposition.

Under the sanctions, sale proceeds from PDVSA’s exports of roughly 500,000bbl/d of crude to the US will be blocked.

PVM Oil analyst Stephen Brennock said: “Another major risk event for the oil market will be US-China trade talks which get underway today.

“Both sides are now faced with a now or never moment in settling their trade spat.”

Beyond Venezuela’s sanctions, analysts pointed to economic weakness as countering troubles on the supply side.

Due to a trade war between the world’s two biggest economies the US and China, global economic growth is weakening.

Last week, China reported its lowest annual economic growth in nearly 30 years.

Julius Baer analyst Carsten Menke said: “The main risks for supply could come from a violent confrontation within the country, damaging the oil infrastructure.”

Having imposed significant tariffs on each other’s imports, Washington and Beijing are set to hold a new round of trade talks.