October 19, 2023 (MLN): Oil prices fell on Thursday on expectations that the US will ease sanctions on Venezuela, coupled with OPEC showing no signs of supporting Iran's call for an oil embargo on Israel.
Brent crude is currently trading at $89.97 per barrel, down by 0.31% on the day.
While West Texas Intermediate crude (WTI) is trading at $86.85 per barrel, down by 0.22% on the day.
The Organization of the Petroleum Exporting Countries (OPEC) is not planning to take any immediate action on OPEC member Iran's call, easing concerns over potential disruptions, as Reuters reported.
Israel imports about 250,000 barrels per day (bpd) of oil, mainly from Kazakhstan, Azerbaijan, Iraq and African countries, according to Citi analysts in a note.
"We believe an embargo from Kazakhstan and Azerbaijan, a strong Israeli ally, is unlikely," they said.
There was also a pullback in prices as U.S. President Joe Biden's visit to Israel concluded without any further escalation in the Israel-Hamas conflict, said CMC Markets analyst Tina Teng.
"But the market is still under upside pressure amid the geopolitical tensions," she said.
Still, prices were pressured by the announcement that the U.S. issued a six-month license authorizing transactions in Venezuela's energy sector, an OPEC member after a deal was reached between the Venezuelan government and the country's political opposition to ensure fair 2024 elections.
Venezuela's oil flows could help to ease global oil prices, up amid the Israel-Hamas conflict, sanctions on Russia, and OPEC+ decisions to reduce output, but Venezuela needs investments to boost output following years of sanctions.
U.S. crude oil and fuel inventories dropped last week on rising demand for diesel and heating oil, according to data from the Energy Information Administration.
Distillate fuel stockpiles fell by 3.2 million barrels in the week to October 13 to 113.8m barrels, EIA data showed.
Crude inventories fell by 4.5m barrels to 419.7m barrels, while gasoline fell by 2.4m barrels to 223.3m barrels.
Supply may tighten further as Russia's oil exports via its western seaports in November are seen falling by some 300,000 bpd as domestic refineries are expected to raise runs as seasonal maintenance ends.
Copyright Mettis Link News
Posted on: 2023-10-19T12:07:03+05:00
