Crude oil futures prices closed lower on Tuesday (17th), as the United States intends to ease sanctions on Venezuela, crude oil prices fell from highs since late March.
energy commodity prices
- Delivered in June WTI CrudeFutures fell $1.8, or 1.6%, to settle at $112.40 a barrel, retreating from an intraday high since March 24 hit by the most-active contract.
- Delivered in July Brent CrudeFutures fell $2.31, or 2 percent, to settle at $111.93 a barrel, retreating from session highs since March 28.
- Natural gas futures for June delivery rose 4.4% to settle at $8.304 per million Btu.
- Gasoline futures for June delivery fell 2% to settle near $3.9417 a gallon, retreating from Wednesday’s record high.
- Delivered in JuneThermal Fuel FuturesPrices fell 2.8 percent to settle at $3.7993 a gallon.
market driving force
The U.S. government is easing sanctions on Venezuela to encourage U.S.-backed Venezuelan opposition parties to resume talks with Nicolas Maduro’s ruling party, media reports said.
The Associated Press, citing two senior U.S. government officials who asked not to be named, said the limited change would allow Chevron (CVX-US) can negotiate its license with Venezuela’s state-run oil company PDVSA, but will not drill or export any Venezuelan oil.
Crude’s gains have been solidified by continued gains in gasoline prices, fueled by falling inventories over the past few weeks. While implied demand for gasoline has fallen, the U.S. summer driving season is just around the corner (since Memorial Day weekend). Tight distillate supplies have also led to a surge in diesel prices, also providing support for crude oil prices.
Meanwhile, the easing of lockdown restrictions in China’s largest city Shanghai on Monday also boosted crude prices, analysts said.
Carsten Fritsch, commodity analyst at Commerzbank, said in a report: “Shanghai has been locked down since the end of March, which has put a lot of pressure on oil demand. China’s crude oil processing volume fell to 12.6 million barrels per day in April, the lowest level in March 2020. The lowest level since a month.”
However, uncertainty over the EU ban on Russian crude limited the upside for oil as Hungary continued to block. (For the EU to pass the ban, the 27 member states would need unanimous approval.)
News reports said Monday’s meeting of EU foreign ministers failed to reach an agreement and the talks were pushed back to the ambassadorial level. Analysts said the May 30-31 summit could be the best chance for a deal.