Jan. 30 (UPI) -- Crude oil prices rose Wednesday amid expectations that Venezuelan oil shipments would see some disruption following U.S. sanctions, while traders awaited news later in the day regarding recent U.S. inventory levels and possible interest rate changes.
West Texas Intermediate crude future prices rose 1 percent to $53.85 per barrel as of 8:10 a.m., while Brent crude futures rose 0.9 percent to $61.75 per barrel.
"Recent sanctions in Venezuela have market participants positioning for a higher price environment," Amir Hekmati, oil futures spec trader at Lucid Energy, told UPI.
"WTI has rallied nearly $12 from the December low of $42.67. From a technical standpoint, WTI could be forming an inverse head and shoulder pattern indicating continued upside from these price levels," he added.
Meantime, supply inventories have "yet to fall materially after Saudi output cuts," he said. Saudi Arabia agreed in December to lead an output reduction by OPEC countries of about 800,000 barrels per day starting in January.
Prices are also likely to be strongly influenced by comments from U.S. Treasury Secretary Steve Mnuchin, who said in an interview "that further sanctions on Venezuela are being considered," FxAnalyst Ilya Spivak separately said in a report sent to UPI.
Venezuela, which according to OPEC produced about 1.15 million barrels of crude oil daily in December, is already facing U.S. sanctions announced this week. Under the new sanctions, the nation can sell oil to U.S. companies but all revenue can only be directed to accounts where the leader of the opposition-led Congress, Juan Guaido, has access.
Venezuelan President Nicolas Maduro -- who, according to the opposition and several other countries, lost legitimacy at the start of his second term following controversial elections last year -- has stepped up the confrontation by allowing the Supreme Court to freeze accounts of Guaido and ban his travel.
The ban is likely to curb shipments to the United States, where the Venezuelan oil company PDVSA owns the refiner and fuel retailer Citgo. Other big buyers of Venezuelan oil are China and India.
The U.S. Energy Information Administration is set on Wednesday morning to provide its latest petroleum inventories report.
The U.S. Federal Reserve Chairman Jerome Powell also has a press conference scheduled on Wednesday. Any increase, or hints of an increase, of interest rates would affect the market.
"Traders expect him to come across as dovish, while acknowledging the slowing global economy. He is going to try to avoid agitating the financial markets so expect a soft tone," James Hyerczyk, analyst at FxEmpire, said in a report.