Oil prices were steady Wednesday after Venezuela said it had stopped selling crude to the world's biggest oil company, though analysts said the move would have a negligible impact on U.S. supplies.The state-run Petroleos de Venezuela SA, or PDVSA, said Tuesday it has halted crude sales to ExxonMobil in response to the U.S. oil company's court bid to freeze billions of dollars in Venezuelan assets. ExxonMobil is locked in a dispute over the nationalization of its Venezuelan oil ventures that has seen President Hugo Chavez threaten to cut off all supply to the United States. Venezuela is currently the United States' fourth largest oil supplier.
``The market had come around to hoping that the threats Venezuela had been making about its oil exports to the U.S. wouldn't be carried through,'' said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney.
Light, sweet crude for March delivery fell 3 cents to US$92.75 a barrel on the New York Mercantile Exchange by midday in Singapore. The contract fell 81 cents to settle at US$92.78 a barrel Tuesday.
Analysts said the impact of PDVSA's move on the crude market is primarily psychological and unlikely to significantly reduce supplies. Victor Shum, an energy analyst with Purvin & Gertz in Singapore, said only about 90,000 barrels of crude a day would be affected by the halt in sales.
``It should not significantly change the crude oil supply picture for the U.S. refining system,'' Shum said, adding that Venezuela's oil exports to the U.S. total about 1.2 million barrels per day.
``Most market participants, including myself, don't think that Hugo Chavez will actually go through with his threat of halting crude sales to the U.S.,'' Shum said. ``The amount they sell to the U.S. is about half of what Venezuela produces in total, and at today's high prices, that represents a lot of revenue.''
Investors were also eyeing the release of U.S. petroleum supply data later in the day. In its weekly inventory report, the Energy Information Administration was expected to report that crude inventories grew 2.7 million barrels last week, according to the average estimate of analysts surveyed by Dow Jones Newswires.
Gasoline stocks likely rose 1.9 million barrels, while distillate stocks, which include heating oil and diesel fuel, were expected to fall 1.2 million barrels. Heating oil futures added 0.74 cent to US$2.5985 a gallon (3.8 liters) while gasoline prices rose 0.02 cent to US$2.3682 a gallon.
Natural gas futures dropped 1.1 cents to US$8.425 per 1,000 cubic feet. Brent crude fell 1 cent to US$92.85 a barrel on the ICE Futures exchange in London.
Source: India Economic Times
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