US crude futures jump in Asia trade on Trump’s Venezuela blockade

BEIJING – US crude futures opened a dollar higher in Asian trading on Thursday after President Donald Trump placed a blockade on tankers entering and leaving Venezuela, and most exports from the country remained on hold.

The West Texas Intermediate contract was up 98 cents, or 1.75%, at USD 56.92 per barrel as of 1109 GMT.

Trump on Tuesday had ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, calling President Nicolas Maduro’s administration a foreign terrorist organization.

Sources said most Venezuelan exports remained on hold on Wednesday due to the blockade even though Venezuelan state oil company PDVSA restarting loading crude and fuel cargoes after it had had to suspend operations because of a cyberattack. Chevron vessels were continuing to depart for the US

“While enforcement details remain unclear, the unexpected escalation in US pressure against the Maduro regime has sparked supply disruption concerns and triggered short covering in an oversold market,” IG market analyst Tony Sycamore said in a note.

The news prompted oil prices to rise by more than 1% in the previous session, rebounding from five-year lows driven by progress on Ukraine peace talks that seemed to point the way to a potential easing of Russian sanctions.

(Reporting by Colleen Howe; Editing by Chris Reese and David Gregorio)