Oil rose in New York after jumping the most in more than a week on concerns that US sanctions on Venezuela will pose significant market disruption.
West Texas Intermediate futures climbed as much as 1.3 percent after adding 2.5 percent. Venezuela is considering declaring force majeure on oil exports to the US, a signal it may halt shipments after the White House effectively banned American companies from purchasing the country’s crude. A ban would mean that the 500,000 barrels shipped to the US every day by the Opec member would need to be redirected elsewhere, Societe Generale SA said.
Oil is trading in its tightest range in four months as Organization of Petroleum Exporting Countries and its allies trim output to fight a global glut driven by record US production.
The crisis in Venezuela has so far had only a limited impact on prices as it doesn’t change overall supply and demand picture. Restoring country’s output could take years, according to Jeff Currie, head of commodities research at Goldman Sachs Group Inc.
WTI crude for March delivery rose 56 cents to $53.87 a barrel on the New York Mercantile Exchange.
Brent for March settlement was up 54 cents at $61.86 a barrel on the London-based ICE Futures Europe exchange, and traded at a $7.93 premium to the WTI.