Investing.com – Oil prices advanced on Friday in Asia following reports that the Trump administration was considering sanctions against Venezuelan oil.
The sanctions aim to punish President Nicolas Maduro’s government for rescinding diplomatic ties with Washington amid a leadership crisis in the South American country, according to media reports.
The move triggered concerns that its oil exports could soon be disrupted and sent oil prices higher.
Following the news, traded 1.3% higher to $53.85 per barrel by 12:48 AM ET 905:48 GMT). , the global oil benchmark, was up 1.23% at $61.84.
John Kilduff, founding partner at New York energy hedge fund Again Capital, doubted the Trump administration would go ahead with sanctions on Venezuelan oil.
“If the sanctions are on, they would no doubt be a big blow to the commercial transportation sector, precisely the airlines, truckers and railroads, 100%,” Kilduff said. “WTI is not exactly reflective of that. But at the end of the day, if it’s just crude headlines the market is looking at, then yes, there’s a reason to hold WTI up, although it’s a case of apples and oranges.”
Meanwhile, the Energy Information Administration said U.S. crude inventories rose by 7.97 million barrels in the week to Jan. 18, compared to forecasts for a stockpile draw of 0.042 million barrels. In the previous week, crude inventories declined by 2.683 million barrels.
The surprising weekly jump in U.S. crude inventories was largely overshadowed by the Venezuelan sanctions news and had little impact on oil prices today.
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