LONDON: Oil prices rose about 1% on Wednesday, boosted by concerns about supply disruptions following US sanctions on Venezuela's oil industry but pegged back by uncertainty over the global economy.
US West Texas Intermediate (WTI) crude futures were at $53.83 per barrel by 1210 GMT, up $0.52. International Brent crude oil futures were at $61.93 per barrel, up $0.61.
Washington announced export sanctions against state-owned oil producer Petroleos de Venezuela SA (PDVSA) on Monday, limiting transactions between US companies that do business with the firm.
Oil gains as US imposes sanctions on Venezuela, global supplies weigh
Venezuelan President Nicolas Maduro said on Wednesday he was ready for talks with the opposition although he ruled out snap elections.
The sanctions are aimed at freezing sale proceeds from PDVSA's exports of roughly 500,000 barrels per day of crude to the US.
World oil futures rose more than 2% on Tuesday, but the market has not seen panic buying as a result of the US decision to target Venezuela's oil output.
Its output was already near seven-decade lows while the sanctions affect Venezuelan supply only to the US and analysts believe volumes could eventually be re-routed to China and India at discounts.
"The main risks for supply could come from a violent confrontation within the country, damaging the oil infrastructure," analyst Carsten Menke at Julius Baer said.
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"Yet the risks of such an event seem very low," he added. "This oil will find its way to the market."
Beyond Venezuela, analysts pointed to economic weakness as countering supply-side troubles.
"Another major risk event for the oil market will be US-China trade talks which get under way today (Wednesday)," said Stephen Brennock, analyst at London brokerage PVM Oil. "Both sides are now faced with a now or never moment in settling their trade spat."
Global economic growth is slowing amid a trade dispute between the US and China, the world's two biggest economies.
China reported its lowest annual economic growth in nearly 30 years last week, adding to a litany of worrying economic data from Europe and East Asia.
Officials from Washington and Beijing were set to launch a new round of trade talks on Wednesday. The two sides have slapped hefty import tariffs on each other's goods.
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