Oil steady as investors weigh Venezuela supply threat UPDATE

Oil was steady in early London trade as investors weighed the likelihood of Venezuela carrying out its threat to cut off exports to the US, which has seen prices spike higher.
Venezuelan President Hugo Chavez threatened to withhold exports to the US on Sunday after oil giant Exxon Mobil challenged the nationalisation of a multibillion dollar project by Chavez's government in US, British and Dutch courts. The threat from the world's fifth-biggest oil exporter, and fourth-largest supplier of crude to the US has pushed prices sharply higher, but some market watchers believe the supply concern has been overstated.
'While a disruption in short-haul Venezuelan supplies could hurt the US economy, it would arguably be much more devastating to Venezuela itself -- and notably its political regime, whose high-octane social spending programme is highly dependent on ever-rising oil export revenues,' said Newedge analyst Antoine Halff. 'While more rhetorical fireworks from Venezuela might be on the cards, Caracas seems highly unlikely to carry out its threat, and (is) certainly incapable of doing so for any sustained period of time.'