Oil prices were steady on Thursday as renewed concerns about the global economic outlook offset support from a U.S. threat of sanctions on OPEC member Venezuela.
Brent crude was down 10 cents or 0.2 percent at $61.04 a barrel by 1435 GMT, while U.S. crude rose 15 cents or 0.3 percent to $52.77.
Concerns about an unexpected rise in U.S. crude inventories reported on Wednesday countered gains driven by the possibility of U.S. sanctions on Venezuela’s oil industry.
Investors perceive oil supply to be fairly tightly balanced against demand, but concern about the longer-term outlook for global economic growth has been undermining any bullish moves.
PVM Oil Associates strategist Tamas Varga said “the chances for another down-day are not bad” if the U.S. Energy Information Administration (EIA) confirmed a rise in U.S. oil inventories.
The EIA data is due out later on Thursday, after Wednesday’s release by the American Petroleum Institute saying U.S. crude stocks rose by 6.6 million barrels in the latest week, versus expectations for a fall of 42,000 barrels.
Oil had earlier hit $61.38 after the United States said it could impose sanctions on Venezuela’s crude exports as Caracas descends further into political and economic turmoil.
Venezuelan oil is predominantly heavy crude, which requires extensive refining. It is frequently blended with lighter crudes to give refiners higher-value products.
With Iran already crippled by U.S. sanctions, a drop in Venezuelan exports could squeeze global supply further.
“The potential is that the U.S. is starting to put things in motion and the risk for an acceleration in the decline in production from Venezuela is increasing,” Petromatrix strategist Olivier Jakob said. “This does provide a new upside risk for the market.”
The Brent and U.S. West Texas Intermediate (WTI) contract are both backed by light, sweet crude, and are not directly linked to Venezuelan oil.
But concern about the supply of heavy crudes is apparent in the U.S. physical market, where the price for Mars Sour, a medium crude, shot to its highest since early 2011.
However, prices have been under pressure from persistent worries about the U.S. trade war with China, as well as slower European growth and more fragile emerging economies.
The International Monetary Fund this week cut its world forecasts for growth in 2019 and 2020.
