Oil up on Venezuela turmoil despite surging United States supply

Oil up on Venezuela turmoil despite surging United States supply

Oil up on Venezuela turmoil despite surging United States supply

Those deliveries are being made largely through oil-for-debt repayment structures as output from Petróleos de Venezuela, S.A., known as PDVSA, has slumped to near 70-year lows during a nationwide economic crisis.

However, while Canadian producers should benefit from rising prices for heavy crude, they are not in a strong position to replace any declines in Venezuelan imports to the United States, owing to the lack of pipeline space and the straining capacity of the crude-by-rail option.

"A dramatic escalation in tensions has raised fears that the US could impose sanctions on Venezuelan oil, threatening to complicate OPEC's job of balancing global oil supplies", Lawler said.

The driver of Friday's trading activity was said to be the US signalling that it may impose sanctions on Venezuelan exports after recognizing opposition leader Juan Guaido as interim president this week, prompting president Nicholas Maduro to cut ties with Washington.

Full year Iranian imports dropped to 29.274 million tons, or 585,475 bpd, down 20 percent from 2017 after the United States imposed sanction on Tehran over its disputed nuclear program. However, it has not yet taken that step, nor has it elected to cut off supply of USA oil that goes to Mexico.

"Sharp production cuts by OPEC+ have kept crude oil futures supported, however, as market reports indicate for a marked output reduction in Dec 2018", said Benjamin Lu, analyst at Phillip Futures.

Mr. Monaldi said the USA imports account for 80 per cent of PDVSA's revenue.

The ongoing OPEC+ agreement to curb oil output remains the nearly exclusive source of support for prices.

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"The crude market is now focusing on global growth concerns primarily ..."

In 2017, the most recent year that data was available, Venezuela accounted for about 6 percent of US crude imports.

Quoting the Annual Statistical Bulletin of the Organization of the Oil Exporting Countries (OPEC), the "NDTV" had stated that Venezuela had 296.5 billion barrels of oil under its control.

Though the United States produces almost 12 million barrels of oil a day, complex Gulf Coast refineries need heavier crude grades to produce diesel and other high-margin products, and can not simply sub in light crude. The move back toward the upside came in spite of bearish EIA inventory data that showed 7.97 million barrels of crude oil stockpiled the week prior when a 42,000 drawdown of reserves was expected.

"It would make a tight market even tighter".

Record U.S. production would likely offset any short-term disruptions to Venezuelan supply due to possible U.S. sanctions, Britain's Barclays said in a note. "If it happens, it would be an unambiguous headwind for refiners already struggling to find supplies", said Bob McNally, president of Rapidan Energy Group, an energy consultancy in Bethesda, Maryland.

Crude oil prices were mixed Thursday, with USA crude boosted by the threat of sanctions on Opec member Venezuela. Articles appear on euronews.com for a limited time.

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