Benchmarks for light, sweet crude oil and Brent crude both jumped to settle more than $1/bbl higher on Jan. 29 after the US announced sanctions on Venezuela and as US-China talks were scheduled in Washington, DC, Jan. 30-31.
New US sanctions were imposed on Venezuela’s state-owned oil company Petroleos de Venezuela SA to block US imports of Venezuela’s heavy crude oil (OGJ Online, Jan. 29, 2018).
Separately, a Chinese delegation led by Vice-Premier Liu is meeting with their US trade counterparts. US President Donald Trump has said he plans to raise tariffs to 25% on $200 billion of Chinese goods, up from the 10% levies imposed last year.
Without a deal, or an agreement to extend talks, the tariff increase becomes effective in early March. Trump suggests there is progress toward reaching a deal although several US top advisers told the Wall Street Journal the Chinese show few signs of changing their stance.
Trump and China’s President Xi Jinping agreed to negotiate toward a deal when they met in Buenos Aires during December 2018.
Oil investors also are watching efforts by France, Britain, and Germany to set up a special-payments company to secure some trade with Iran, which would blunt US sanctions against buying Iranian exports.
US officials urged its trading partners to stop importing Iranian crude oil although US waivers were granted for China and some other nations, enabling them to temporarily import Iranian crude without repercussions from US officials.
In May, Trump announced a US exit from a 2015 international deal in which sanctions against Iran by a coalition of countries were lifted in exchange for Iran’s cooperation on its nuclear program.
The European Union seeks to create a special-purpose vehicle to persuade Iran to stay in the 2015 international deal.
Energy prices
The March contract for light, sweet crude oil on the New York Mercantile Exchange rose $1.32 to settle at $53.31/bbl on Jan. 29 while the April contract gained $1.31 to settle at $53.60/bbl.
NYMEX natural gas for February increased nearly 4¢ to close at a rounded $2.95/MMbtu on Jan. 29.
Ultralow-sulfur diesel for February rose nearly 6¢ to a rounded $1.90/gal. The NYMEX reformulated gasoline blendstock for February gained 2¢ to $1.35/gal.
Brent crude for March increased $1.39 to $61.32/bbl on London’s Intercontinental Exchange while the April contract also increased by $1.39 to settle at $61.20/bbl. The gas oil contract for February increased by $16.75 to $572.25/tonne on Jan. 29.
The average price for the Organization of Petroleum Exporting Countries’ basket of crudes was $59.71/bbl on Jan. 29, up 14¢.
Contact Paula Dittrick at [email protected].
