Crude oil closed lower on Tuesday (May 17) after reports that the United States is preparing a partial easing of sanctions against the Venezuelan government. This gives investors hope that more oil will come to the market.
- WTI crude futures were down $1.8, or 1.6%, at $112.40 a barrel.
- BRENT crude futures were down $2.31, or 2%, at $111.93 a barrel.
Crude oil futures fell following media reports that President Joe Biden’s administration plans to ease some of the sanctions imposed on the Venezuelan government. This is intended to push the government of Nicolas Maduro back to the negotiating table with U.S.-backed opposition leaders.
One of the U.S. liberal approaches is to authorize Chevron Corp. to deal directly with PDVSA, Venezuela’s national oil company.
Crude oil futures also came under pressure after U.S. Federal Reserve Chairman Jerome Powell said at last night’s Future of Everything Festival seminar that the Fed will continue its tight monetary policy until it is convinced inflation is slowing.
Investors are watching closely as the European Union (EU) prepares to impose sanctions on Russian oil. The EU will hold a summit on May 30 and 31 to discuss the agreement.
Investors are also waiting for the weekly U.S. crude oil inventories, which are to be published today by the EIA.
The Spot Market is Open
Wednesday, May 18, 2022