1 month ago
Commodities

Oil Prices Advance on Uncertainties Over Venezuela

Investing.com - Oil prices advanced on Wednesday in Asia following the U.S. Treasury’s decision to impose sanctions on Venezuela’s state-owned

Investing.com - Oil prices advanced on Wednesday in Asia following the U.S. Treasury’s decision to impose sanctions on Venezuela’s state-owned oil firm, Petróleos de Venezuela SA (PDVSA) earlier this week.

U.S. announced on Monday that it is banning PDVSA from shipping crude into the United States with immediate effect.

Oil prices saw mixed reaction so far this week following the news as traders assessed the potential global-market impact of the U.S., with some analysts saying "oil traders aren't sure" about how to read the situation.

The restrictions by Washington on PDVSA cover only exports to the United States. That leaves the Venezuelan company to do business with any other nation.

"It's my view that oil will always find a way into the market regardless of what the U.S. does," said Scott Shelton, energy futures broker and commentator at ICAP (LON:NXGN) in Durham, N.C.

“The oil that Venezuela currently exports to the U.S. will be diverted to other countries and sold at lower prices. For countries like China and India, yesterday’s news was akin to Black Monday. They will be able to pick up these oil volumes at great discounts,” said Rystad Energy analyst Paola Rodriguez-Masiu.

On Wednesday, Crude Oil WTI Futures were up 0.2%, at $53.41 per barrel by 12:06 AM ET (05:06 GMT).

Brent Oil Futures, the global oil benchmark, gained 0.3%, at $61.37 per barrel.

Meanwhile, Reuters cited a U.S. Department of Treasury spokesman who called the sanctions against PDVSA "extremely sophisticated," adding that the department would "take questions from industry and stakeholders and issue FAQs as appropriate."

Sino-U.S. trade tension is expected to be another major focus this week. Officials from Washington and Beijing are set to begin another round of trade talks today, and the outcome of the meeting is expected to an influencer of sentiment in the oil markets.

The two sides are trying to reach a deal before a U.S. tariff hike on March 2 that has been announced if no agreement is reached.