Oil steadies on US stock forecasts, Venezuela fears

NEW YORK — Crude oil futures steadied on Tuesday as the focus turned to falling inventories in the United States and further output constraints in Venezuela and Libya.

Supply disruptions in Venezuela returned to the forefront as two of the country’s four crude upgraders are scheduled to undergo maintenance in the next few weeks. The units have the ability to process a combined 700,000 barrels per day, and are used to prepare extra-heavy oil for export.

“Every time there’s an update that the situation in Venezuela is, in fact, worsening, it props up the market,” said John Kilduff, a partner at Again Capital Management in New York.

US West Texas Intermediate ( WTI) crude settled up 2 cents at $68.08 a barrel.

Brent futures rose 32 cents to $72.16 a barrel, after earlier trading as low as $71.35 a barrel, its lowest level since April 17.

In addition to Venezuela’s falling output, traders are looking at US inventories, which are expected to decline 3.5 million barrels in the week to July 13, according to a preliminary Reuters poll.

Oil prices fell in post- settlement trade after data from industry group the American Petroleum Institute showed that US crude inventories rose by 629,000 barrels in the week ending July 13, to 410.7 million, compared with analysts’ expectations for a decrease of 3.6 million barrels.

The market is seeking clear signals on supply, including whether the US will release crude from its Strategic Petroleum Reserve and whether Libya’s oil production will rebound following military clashes in late June and early July, said Tariq Zahir, managing member at Tyche Capital in New York.

“You really have to see how much Saudi is going to produce, along with Russia,” he said.

Oil prices have fallen by almost 10% over the past week as crude export terminals in Libya have reopened and exports from other OPEC countries and Russia have increased. But late on Tuesday, Libya’s National Oil Corp. said it had declared force majeure on crude oil loadings at Zawiya port as of Monday.

This contractual provision allows the oil producer to halt deliveries if production falls for reasons beyond its control. The oil company said output from its Sharara field had fallen by 125,000 barrels per day ( bpd) following the recent attack and kidnapping of four employees of the oil company Akakus at the field.

Production from seven major US shale oil formations is expected to rise by 143,000 bpd to a record 7.47 million bpd in August, the US Energy Information Administration said on Monday.

Goldman Sachs said in a report that it expects price volatility to remain elevated, keeping Brent in a $ 70- 80 per barrel range in the short term. —