US/Venezuela News

Crude prices remain on watch as we move through the back of the week with the futures market attempting to stabilise following a sharp sell off yesterday. We’ve seen volatility this week around news relating to the US seizure of an oil tanker off the coast off Venezuela. This comes shortly after the US capture of President Maduro though, for now the market reaction to both events has been limited suggesting that a broader impact on the market is not expected given the relatively small amount of crude exported from Venezuela.

EIA Inventories Drawdown

The bounce in crude prices today comes in response to yesterday’s EIA crude inventories data which reflected a large drawdown in crude stores. The EIA reported a roughly 4-million-barrel draw, much deeper than the -1.2 million level expected. This comes on the back of a roughly 2-million-barrel drawdown a week prior, reflecting better demand recently.

US Data On Watch

Looking ahead, tomorrow’s US jobs data will be on watch and could cause some impact on crude prices if we see any big surprises and/or USD volatility. Alongside that data, traders will be monitoring incoming news flow around US plans to take over the Venezuelan oil industry. Any concrete moves towards this should see crude prices coming under fresh pressure, adding to the oversupply concerns which have been weighing on prices recently.

Technical Views

Crude

For now, crude prices remain capped by the bear channel highs and the 57.57 level res. 2025 lows around 55.07 are the key support marker now for now with any break of that region seen opening the way for a test of deeper support at the 51.31 level next.