Oil revives from 3-week fallout as US poses sanctions on Venezuela, Iran

In contrast to US oil prices, which were up 26 cents, or 0.31 percent, at $82.95 per barrel, Brent futures were up 10 cents, or 0.11 percent, to $87.39 a barrel.

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On Thursday, April 18, oil prices remained relatively stable as investors assessed the impact of US sanctions on Venezuela and Iran, as well as positive US jobs statistics, against the broader backdrop of demand concerns and a reduction in Middle East tensions, which had caused prices to drop by 3% on Wednesday.

In contrast to US oil prices, which were up 26 cents, or 0.31 percent, at $82.95 per barrel, Brent futures were up 10 cents, or 0.11 percent, to $87.39 a barrel. At their intraday lows, both benchmarks had fallen more than $1, reaching their lowest point in about three weeks.

Factors affecting crude oil prices

The amount and quality of Venezuela’s sales of crude and fuel will suffer as a result of the loss of a significant US license that allowed it to export oil to markets throughout the world, according to Reuters.
  • In response to Iran’s drone strike on Israel this weekend, the US also imposed sanctions on the nation that target its manufacturing of unarmed aerial vehicles. However, more sanctions did not affect Iran’s oil sector.
  • Earlier in the day, Iran had threatened to extend the ongoing crisis by reviewing its nuclear program in reaction to retaliatory Israeli threats, which analysts believe may have supported oil prices.
  • The announcement follows three sessions in which investors have mainly unwound the geopolitical risk premium in oil prices, with Brent losing about 3.5%.
  • The US labor market is still strong, which is fueling the economy and delaying the possibility of rate cuts in the US until September. This is demonstrated by the fact that US jobless claims remained unchanged at low levels last week.
  • The Energy Information Administration reported that oil inventories increased by 2.7 million barrels to 460 million barrels in the week ending April 12. This is almost twice the amount of barrels that analysts had predicted a build of 1.4 million, according to a Reuters poll.

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