Brent for March settlement advanced 46 cents to $61.55 a barrel on the London-based ICE Futures Europe exchange, and traded at a $7.89 premium to WTI. But that's all expected to change this year as gasoline stockpiles surge, and a shortage of heavy crude from Venezuela wouldn't make refiners' lot any easier.
Barclays on Thursday cut its 2019 Brent price forecasts, saying large US production may offset any short-term disruptions to Venezuelan supply due to possible USA sanctions. But the two countries have long history of interdependency when it comes to oil that has endured through years of political tensions.
Still, the long-term trend is a declining dependence on Venezuelan oil. Even without new US sanctions, Venezuela's production - now about 1.2 million barrels a day - may lose a further 300,000 to 500,000 barrels a day, RBC estimates.
Suspense over U.S. -China trade talks and broader gloom over world economic growth put a check on prices, however.
Fundamentally, however, global oil markets are still well supplied, thanks in part to surging output in the United States, where crude production rose by more than 2 million barrels per day (bpd) past year to a record 11.9 million bpd.
Tensions flared anew this week as National Assembly leader Juan Guaido moved to oust strongman President Nicolas Maduro, with the backing of the USA and other countries. Those sanctions faced opposition from Republican lawmakers representing Gulf Coast states, where refineries process heavy crude into fuels.
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Another consideration is whether Washington freezes the Venezuelan leadership's assets or alters the U.S. -Venezuela commercial relationship in other ways, Grais-Targow notes.
"The main risk for the oil market is the situation in the Middle East because this is the big area of production, not only in Saudi Arabia but in the UAE and Kuwait". Gas Energy's report said India was the second-largest importer of Venezuelan crude in November.
In 2017, the most recent year that data was available, Venezuela accounted for about 6 percent of US crude imports.
More broadly, the slide in US oil followed a tumble in global stock markets on Tuesday, with investors anxious about the threat of a widespread economic slowdown. The threat to reduce supplies supported futures prices.
Still, some analysts said the possibility of immediate sanctions were unlikely.
Developments in Venezuela take on an even greater importance for the oil market considering that the country holds the rotating presidency of OPEC this year, analysts stressed. The global benchmark crude has dropped 1.9 percent so far this week.