U.S. crude oil refinery inputs decrease last week

U.S. crude oil refinery inputs decrease last week

Tellingly, even though Venezuela's oil production has dropped sharply, the country still shipped 506,000 barrels per day to the United States in October, according to the most recent Energy Information Administration statistics.

The Trump administration said the USA could impose new sanctions on Venezuela's oil sector as soon as this week if the political situation there deteriorates further.

Output has fallen from more than three million barrels per day in the 1990s to 1.339 mbd a year ago, according to OPEC data.

"The scarcity of heavy oil in the Gulf Coast will increase the price, plus the fact that you have to import from a place like Iraq, makes it a little costlier", Monaldi said.

Global oil demand will be impacted by economic growth in all areas of the world and while there's signs of a slowdown, demand is holding up for the time being.

The country's current president, Nicolas Maduro cut off relations with the U.S. as Guaido declared himself president.

Thus far, the political crisis in Caracas - really just the latest escalation of the long-standing crisis engulfing the country - has prompted a twitch in crude oil prices rather than a full-on spasm of fear.

With Iran already crippled by USA sanctions, a drop in Venezuelan exports could squeeze global supply further.

U.S. West Texas Intermediate (WTI) crude futures settled at $53.69 per barrel, up 56 cents, or 1.05 per cent. WTI futures fell about 0.2 per cent on the week, also posting the first week of declines in four weeks.




After ending 2018 in free-fall, oil is off to its best start for a year since 2001, gaining roughly 18% since the start of January on production cuts by the world's big exporters, notably Saudia Arabia.

"There's not enough pipes to ship all the oil that companies have been producing", said Jim Burkhard, vice president of oil markets research at IHS Markit.

"Forcing Venezuela into the spot market to dump prompt crude puts them in a corner". Prices could plunge to $48.50 if this support level fails.

Analysts have predicted a more balanced market due to a production cut pact by the Organization of Petroleum Exporting Countries (OPEC) and its allies including Russian Federation, as well as potential export disruptions in Venezuela, Iran and Libya.

If Nymex crude oil prices offer a handy way to take the market's temperature on Venezuela, the two margins above tell the story beneath the story. Gulf Coast refineries depended on Venezuelan heavy crude for about a quarter of its imports, according to data from the EIA.

A possible move by President Donald Trump to hurt Venezuela's oil industry could prove a shot in the arm for the Xi Jinping and Narendra Modi administrations.

That standoff is likely to underpin crude oil prices.

"Most of the cash that the Venezuelan government gets comes from the USA market, so that means they will have to figure out how to ask the Chinese to get some cash back, because otherwise they will be starved for cash", Monaldi said. Mars traded at a $6.90 premium to USA crude on Wednesday, a five-year high, according to Refinitiv Eikon data, as bidders came into the market to secure supplies through the second quarter, traders said.

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