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by Stockwatch Business Reporter
West Texas Intermediate crude for March delivery added $1.32 to $53.31 on the New York Merc, while Brent for March added $1.39 to $61.32 (all figures in this para U.S.). Western Canadian Select traded at a discount of $9.90, down from a discount of $9.55. Natural gas for February added four cents to $2.95. The TSX energy index added 1.31 points to close at 148.90.
Global oil prices rose after the U.S. government approved sanctions against Venezuela's state-owned oil company, PDVSA, effectively cutting off imports of Venezuelan crude oil. The sanctions are meant to hasten the ouster of Venezuelan President Nicolas Maduro by starving his government of cash. Of course, given that Venezuela is the No. 4. oil importer to the United States -- only Mexico, Saudi Arabia and Canada send more -- the sanctions could also squeeze the U.S. Gulf Coast refineries that count on Venezuela to send a cheap and steady stream of heavy crude. Someone will have to make up the difference in supply. Cheerleaders of the Western Canadian energy sector are all aquiver at the thought, but they are likely to be disappointed, according to the analysts at RBC. "Common thought is that Western Canadian Select should fare well, but our barrel tracker indicates that Canada has a limited footprint at U.S. refiners of Venezuelan crudes," wrote the analysts. Regulatory challenges and a lack of pipeline capacity will make it difficult for Canadian producers to respond to extra U.S. demand. The RBC analysts see Mexico and Iraq as the more likely beneficiaries.
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