Oil prices rose slightly on Thursday (December 18th) as investors assessed the possibility of further US sanctions on Russia and the supply risks posed by the blockade of Venezuelan oil tankers.

Brent crude rose 32 cents, or 0.54%, to $60 a barrel at 0910 GMT. U.S. West Texas Intermediate crude rose 38 cents, or 0.68%, to $56.32 a barrel.

The US intention to impose more sanctions on Russia and the threat of a blockade of sanctioned tankers carrying Venezuelan oil pushed prices higher, said PVM analyst John Evans.

On Wednesday, Bloomberg reported that the US was preparing another round of sanctions against the Russian energy sector if Moscow did not agree to a peace deal with Ukraine, citing people familiar with the matter. A White House official told Reuters that President Donald Trump had not yet made any decision on sanctions against Russia.

Further measures targeting Russian oil could pose a greater supply risk to the market than Trump's announcement on Tuesday that the US would block sanctioned tankers entering and leaving Venezuela, ING analysts said in a note.

The Venezuelan blockade could impact 600,000 barrels per day of Venezuelan oil exports, mostly to China, but 160,000 barrels per day of exports to the US are likely to continue, ING said. Chevron vessels continued to depart for the US based on prior authorization from the US government.

Most other Venezuelan exports remained suspended on Wednesday, although state oil company PDVSA resumed loading crude oil and fuel after suspending operations due to a cyberattack, according to sources and customs data.

It is unclear how the US blockade will be enforced. The US Coast Guard last week took the unprecedented step of seizing a Venezuelan oil tanker, and sources said the US was preparing more similar measures. Venezuelan crude accounts for about 1% of global supply. (alg)

Source: Reuters.com