(Laila Kearney – Reuters)
Oil prices rallied above 2 per cent on Tuesday after the United States put sanctions on state-owned Venezuelan oil company PDVSA, a move likely to curtail the OPEC member’s crude exports and chip away at global oversupply worries.
International Brent crude oil futures were up $1.42 to $61.35 a barrel, or 2.4 per cent, by 1:30 p.m. EST. U.S. West Texas Intermediate (WTI) crude futures increased $1.32 to $53.31 a barrel, or 2.5 per cent.
“The Venezuelan situation is obviously supportive,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “When you put the Venezuelan sanctions along with OPEC production cuts and more concerns about Libyan oil production … you see a market that is generally tightening.”
Venezuela is among the world’s largest heavy crude oil producers, and the United States has been its biggest client, taking about half the country’s export volumes, followed by India and China. Click here to read more.