Oil prices fell 1 percent on Wednesday, weighed down by swelling USA inventories and a plunge in global stock markets amid concerns over an economic slowdown.
Brent crude was down 10 cents or 0.2 percent at $61.04 a barrel by 1435 GMT, while USA crude rose 15 cents or 0.3 percent to $52.77.
More broadly, the slide in USA oil followed a tumble in global stock markets on Tuesday, with investors anxious about the threat of a widespread economic slowdown.
Tensions flared anew this week as National Assembly leader Juan Guaido moved to oust strongman President Nicolas Maduro, with the backing of the US and other countries. Shortly after President Donald Trump recognized Guaido, Venezuelan President Nicolas Maduro severed relations with the United States and gave USA diplomatic personnel 72 hours to leave the country.
However, the market gains were capped as the U.S. Energy Information Administration (EIA) reported Thursday that the nation's crude oil inventories jumped 8 million barrels in the week ending January 18.
The surge in output has resulted in swelling United States fuel inventories.
Trump may have more power to impose sanctions on Venezuelan oil because prices are lower, according to Croft.
However, fresh data on surging US fuel stocks and worries about U.S.
Brent crude oil futures were at $60.86 a barrel at 1215 GMT, down $0.23 or 0.38%.
Oil prices stabilise at $61.58/b over by OPEC production cut
Maduro responded by breaking relations with the United States.
The OPEC member has already seen its output drop 50 percent in five years as a spiraling economic crisis takes its toll on the oil industry. Venezuela's crude is so heavy it must be blended with naphtha, a liquid hydrocarbon mixture used to dilute oil so that it can be transported. Sanctions would likely accelerate those trends.
Worries about the longer-term outlook for global economic growth, and therefore demand for crude, has pressured oil prices.
The oil executive also underscored "difficult access to water, and electricity" in Venezuela.
Refiners would be forced to pay up for heavy crude from other nations - and incur higher shipping costs to bring those barrels home, according to Simmons Energy analysts led by Blake Fernandez.
"If he is added to the US sanctions list, that will be just one more headache for OPEC in the United States, where they're already facing potential NOPEC legislation", said Croft.
Global oil markets are facing an uncertain year with slowing global growth driving less global demand for oil while the supply picture looks unclear with production cuts by OPEC and Russian Federation potentially counteracted by the growth in USA shale oil output.
The "NDTV" had reported: "The South American country's known reserves grew between 2009 and 2010 by 40 percent, compared with the stagnation of Saudi Arabia's reserves, which OPEC figures to be 264.52 billion barrels".
White House: President Trump OK with second shutdown over border spat
A strong majority of Americans blamed him for the standoff and rejected his arguments for a border wall, polls showed. Asked if the shutdown was worth it, Sen. "The answer to your question probably has to be, 'We'll see what happens'".