* Lines to buy gasoline in Caracas
* Supplies normal in rest of the country
* PDVSA is offering more fuels on the open market (Adds lines at gas stations in Caracas)
By Marianna Parraga
Feb 21 (Reuters) - Venezuela’s oil minister said on Friday he may cut off deliveries of fuel to areas hit by anti-government protests, and the threat of local supply disruptions could further drive up crude prices even though exports are running normally.
Domestic conflicts in Libya and South Sudan, as well as escalating unrest in Venezuela, supported Brent prices this week, but by Friday traders sold positions before the weekend, leaving the price for Brent around $109.69 a barrel.
In Venezuela, the weekly price for the local oil basket, which includes crude and products, rose for a second straight week, climbing 84 cents to $98.61 a barrel. Venezuela is the largest South American oil exporter.
Venezuela’s current unrest, with clashes between protesters and the police, have left eight people dead. There have also been scores of injuries and arrests since the violence broke out eight days ago, the most serious turmoil since President Nicolas Maduro was narrowly elected in April 2013.
“We will be forced to suspend fuel supplies to zones under fascist siege, in order to preserve people’s security,” Oil Minister Rafael Ramirez said via Twitter, in reference to protesters. His comments were confirmed by state-run oil company PDVSA, which he also runs.
Ramirez later appeared to walk back the comments, saying via Twitter: “PDVSA is operating normally, fulfilling all deliveries to the local fuel market, for peace and safety.”
But his earlier comments caused some people to drive to crowded gas stations in the eastern part of the capital Caracas to fill up their tanks, a distributors group told Reuters. The group said supplies in the rest of the country were normal, with some delays to deliver fuels in areas with unrest.
The most violent protests have occurred in the western state of Tachira, which abuts the border with Colombia and has suffered supply problems in the past.
Maduro has promised to further the “socialist revolution” of his longtime mentor, the late President Hugo Chavez, who died of cancer last year.
Ramirez has said several times this month that Venezuelan exports were running normally.
At the same time, the government has implemented a “contingency” plan to reinforce security around oil installations.
Oil sales by Venezuela, which generate more than 90 percent of the country’s hard currency, have been stable in recent weeks. PDVSA is selling crude and products through both supply contracts and tenders on the open market, according to documents seen by Reuters.
In February, the company increased sales of jet fuel after partially fixing problems in its domestic refining network, and after years of selling ultra-low-sulfur diesel only on the local market, it offered a cargo for export in March.
Traders said the increased fuel exports have raised cash for a company that has well-known cashflow problems stemming from debt-for-oil agreements with China.
They added they do not expect any export disruptions for now, but acknowledged that protests could make it difficult to deliver gasoline and diesel to local gas stations in a country with consumption of more than 700,000 barrels per day (bpd).
Venezuela has not suffered any fuel shortages since a months-long strike in 2002-2003 followed a brief coup against Chavez, who regained power and led the country until his death.
The strike slashed crude output to 25,000 bpd from almost 3 million bpd, and long lines of people trying to buy gasoline or gas for cooking took on a surreal tone in a country with the world’s largest crude reserves.
It took a long time to recover the industry from the damages and the firing of almost half of PDVSA’s staff, accused of participating in the strike. (Reporting by Marianna Parraga; Editing by Terry Wade and Leslie Adler)