Oil prices bounce amid geopolitical tensions

Source: Xinhua| 2019-01-26 05:28:33|Editor: Mu Xuequan
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NEW YORK, Jan. 25 (Xinhua) -- Oil prices extended gains on Friday as concerns over tighter global supply amid the threat of U.S sanctions on Venezuelan oil sector outweighed surging U.S. stockpiles.

The West Texas Intermediate for March delivery climbed 56 U.S. cents to settle at 53.69 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery rose 55 cents to close at 61.64 dollars a barrel on the London ICE Futures Exchange.

Venezuelan President Nicolas Maduro said on Thursday he will close the country's embassy and consulates in the United States, a day after severing "diplomatic and political" ties with Washington.

The president cut off relations with the United States following U.S. President Donald Trump's official recognition of opposition leader Juan Guaido as interim president.

Traders grew concerned about possible U.S. sanctions on Venezuelan oil trade and tighter global supply amid rising tensions between Washington and Caracas.

"With sanctions already on Iran, further sanctions applied to Venezuela could see the price of oil shoot up very quickly as supply tightens further," said Jasper Lawler, head of research for London Capital Group, who was quoted by MarketWatch.

The global energy supply was in part underpinned by a spike in U.S. crude inventories.

The number of active U.S. rigs drilling for oil, which offers a hint on future production activity, rose by 10 to 862 this week, according to data released by oilfield services company Baker Hughes on Friday.

Meanwhile, the U.S. Energy Information Administration (EIA) reported Thursday that the nation's crude oil inventories jumped 8 million barrels in the week ending Jan. 18, a two-month high.

At 445 million barrels, U.S. crude oil inventories were about 9 percent above the five-year average for this time of year, according to the Weekly Petroleum Status Report by the EIA.