US-China trade unease weighs on oil prices
US sanctions imposed on state oil firm Petroleos de Venezuela this week are causing some supply disruptions
London — Oil prices steadied after two days of gains on Thursday, as lower-than-expected US fuel stock rises and US sanctions on Venezuelan output boosted investor confidence but US-China trade tensions weighed on sentiment.
US West Texas Intermediate (WTI) crude futures were down nine US cents at $54.14 per barrel at 9.55am GMT.
Brent crude oil futures were up 14c at $61.79 per barrel. The March contract expires on Thursday.
Data from the US Energy Information Administration (EIA) on Wednesday showed US crude oil stockpiles rose less than expected last week due to lower imports, notably a fall in Saudi crude supply.
"Crude oil prices were stronger after signs emerged that Opec cuts are impacting trade," ANZ bank analysts wrote in a note, calling it the second lowest weekly level since 2010.
US sanctions imposed on state oil firm Petroleos de Venezuela SA (PDVSA) this week are also causing some supply disruptions.
Oil inventories have started to build up at Venezuela's oil ports and terminals as PDVSA is finding it cannot export crude at its usual rate due to US sanctions imposed this week.
As of Wednesday, Venezuela had 25 tankers with nearly 18-million barrels of crude — representing about two weeks of the country's production — waiting to load or expecting authorisation to set sail, shipping data showed.
"With the likelihood of a forthcoming decline in Venezuelan production, producer cuts to rebalance the market will prove more effective," Harry Tchilinguirian, strategist at BNP Paribas in London, told the Reuters Global Oil Forum.
"Having said that, any gain in oil prices still remains contingent on the outcome of US-China trade talks."
Global markets anxiously await the outcome of talks which began in Washington on Wednesday aimed at easing a months-long tariff war between the world's top two economies.
The two-day talks are expected to be tense, with little indication that Beijing will address core US demands. If the two sides cannot reach a deal soon, Washington has threatened to more than double tariffs on Chinese goods on March 2.