Oil prices rebounded, rising about two per cent on Thursday after two days of declines as investors assessed developments in Venezuela and worried about supplies from Russia, Iraq, and Iran.
According to Reuters, Brent futures rose $1.21, or 2 per cent, to $61.17 per barrel, while US West Texas Intermediate crude gained $1.02, or 1.8 per cent, to $57.01.
Recall that oil prices fell on Wednesday amid expectations of a surge in supply after United States President Donald Trump said Venezuela would hand over up to 50 million barrels of crude to the US.
According to oilprice.com, Venezuela and the United States reached a deal under which authorities in the South American country would agree to export the oil valued at $2bn to the US.
Brent crude dropped below $60 per barrel on Wednesday evening after Trump said “interim authorities” in Venezuela would be providing 30 million to 50 million barrels of “high quality” oil to the US at market price, thought to be worth close to $2bn.
Reuters reports that the US seized two Venezuela-linked oil tankers in the Atlantic Ocean on Wednesday, one sailing under Russia’s flag, as part of Trump’s aggressive push to dictate oil flows in the Americas and force Venezuela’s socialist government to become an ally.
After capturing Venezuelan President Nicolas Maduro in a Saturday military raid on Caracas, the US was said to be escalating its blockade of vessels that are under sanctions and going to and from the South American country, a member of the Organisation of the Petroleum Exporting Countries oil producers group.
Analysts said oil is “rebounding with the crude benchmarks back to about the levels of last Friday’s close prior to the US removal of Maduro.”
The US could oversee Venezuela and control its oil revenue for years, Trump said in a New York Times interview published on Thursday.
Meanwhile, the US Senate began voting on Thursday on a resolution that would block Trump from taking further military action against Venezuela without congressional authorisation.
UA Energy Secretary Chris Wright said there was room to balance roles for both the US and China in Venezuela to allow for commerce, but that Washington would not allow Beijing to have major control over the Latin American country.
In an interview on Fox Business Network, Wright also said he expected to see Chevron quickly grow its activities in Venezuela, with other US oil majors ConocoPhillips and Exxon Mobil also looking to play a constructive role.
Reuters also reports that a Russia-bound oil tanker suffered a drone attack in the Black Sea that prompted it to request Turkish Coast Guard assistance and divert from its course, according to a notice by Lloyd’s List Intelligence and a separate maritime security source on Thursday.
It was said that the Palau-flagged Elbus vessel “experienced an unmanned marine vehicle and drone attack” on Wednesday, targeting its engine room, and that no injuries were reported among the 25 crew, nor any pollution.
