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Oil steadies after Venezuelan threat spike

By Agencies


Oil steadied above $93 a barrel on Tuesday as investors weighed the prospects for growing stocks of crude in the United States against Venezuela's threat to stop sales to the world's top consumer.


US crude slipped 7 cents to $93.52 a barrel by 9.20am GMT, after ending up almost two per cent the previous day.


London Brent crude eased 4 cents to $93.49 a barrel.


"While a disruption in short-haul Venezuelan supplies would be a blow to the U.S. economy, it would arguably be much more devastating to Venezuela itself," said Antoine Halff of Newedge Group.


"Indeed, despite falling Venezuelan crude output, recent monthly data suggest its exports to the US have been on the rise."


In any case, oil inventories in the United States look healthy.


A Reuters preliminary poll ahead of weekly US data on Wednesday showed a 2.3 million-barrel build in crude and a 1.6 million-barrel increase in gasoline stocks.


Venezuela is the fourth biggest supplier of crude to the United States, and energy analysts have said any interruption to shipments could tighten inventories and push prices higher.


Venezuelan President Hugo Chavez made the threat on Sunday after Exxon Mobil won a court decision freezing $12 billion of Venezuela's overseas assets, stepping up its push for compensation for the nationalisation of a heavy oil project.


Chavez has frequently issued conditional threats to stop shipments to the US amid clashes with the White House, but has never followed through with a halt. (Reuters)