Venezuelan oil supply at risk – ING

The oil market came under pressure again yesterday, with ICE Brent settling a little more than 0.8% lower. WTI is trading lower in early morning trading today, ING’s commodity analysts Warren Patterson and Ewa Manthey notes.

The oil market is currently under pressure

"The prospect of rising OPEC+ supply, combined with intensifying uncertainty over tariffs, hit oil market sentiment. Overnight, there were suggestions that the Trump administration is considering some tariff relief on imports from Canada and Mexico. But heightened uncertainty is sending investors to the sidelines. This is evidenced by a reduction in speculative positioning in both WTI and Brent in recent weeks."

"On the sanction front, the US administration has given Chevron until 3 April to wind down operations in Venezuela. Despite sanctions, Chevron previously had a license to operate in the country and export crude oil to the US. As production stops, 200k b/d of supply is at risk. This will leave US refiners looking for alternative heavy grades of crude oil just as other suppliers — Canada and Mexico — face tariffs."

"Numbers overnight from the American Petroleum Institute show US crude oil inventories fell by 1.5m barrels over the last week. On the product side, gasoline stocks declined by 1.2m barrels and distillate inventories increased by 1.1m barrels. It was a fairly neutral release. Even so, the market is more focused on tariffs at the moment."