Oil prices steadied after two days of gains on Thursday, as lower-than-expected U.S. fuel stock rises and U.S. sanctions on Venezuelan output boosted investor confidence but U.S.-China trade tensions weighed on sentiment.
U.S. West Texas Intermediate (WTI) crude futures were down 9 cents at US$54.14 per barrel. Brent crude oil futures were up 14 cents at US$61.79 per barrel.
Data from the U.S. Energy Information Administration (EIA) on Wednesday showed U.S. crude oil stockpiles rose less than expected last week due to lower imports, notably a fall in Saudi crude supply.
“Crude oil prices were stronger after signs emerged that OPEC cuts are impacting trade,” ANZ bank analysts wrote in a note, calling it the second lowest weekly level since 2010.
U.S. sanctions imposed on state oil firm Petroleos de Venezuela SA (PDVSA this week are also causing some supply disruptions.
Oil inventories have started to build up at Venezuela’s oil ports and terminals as PDVSA is finding it cannot export crude at its usual rate due to U.S. sanctions imposed this week.
As of Wednesday, Venezuela had 25 tankers with nearly 18 million barrels of crude – representing about two weeks of the country’s production – waiting to load or expecting authorization to set sail, shipping data showed.
“With the likelihood of a forthcoming decline in Venezuelan production, producer cuts to rebalance the market will prove more effective, adding, having said that, any gain in oil prices still remains contingent on the outcome of U.S.-China trade talks”, Harry Tchilinguirian, strategist at BNP Paribas in London, told the Reuters Global Oil Forum.
Global markets anxiously await the outcome of talks which began in Washington on Wednesday aimed at easing a months-long tariff war between the world’s top two economies.
The two-day talks are expected to be tense, with little indication that Beijing will address core U.S. demands. If the two sides cannot reach a deal soon, Washington has threatened to more than double tariffs on Chinese goods on March 2.