Oil prices rose in Asian trading on Wednesday as concerns over potential new sanctions on Russia and stalled progress in U.S.-Iran nuclear negotiations raised some supply disruption fears, while investors were cautious ahead of a pivotal OPEC+ meeting later this week.
Higher prices were also attributable to the U.S. decision to prohibit Chevron (NYSE:CVX) from exporting crude from Venezuela under a new asset authorization, increasing concerns over tighter supply.
As of 21:28 ET (01:28 GMT), Brent Oil Futures expiring in July rose 0.7% to $64.54 per barrel, while West Texas Intermediate (WTI) crude futures also jumped 0.7% to $61.33 per barrel.
Investors also await the American Petroleum Institute’s weekly inventory report, which has been delayed this week due to the U.S. Memorial Day holiday on Monday.
Markets await OPEC+ meeting; Russia sanction risks push oil higher
The Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, are weighing the possibility of another production boost at their upcoming meeting, media reports showed last week.
The eight OPEC+ members at their meeting on Saturday may decide on a similar 411,000 bpd output hike for July, Reuters reported on Tuesday, citing sources.
OPEC+ has been in the process of unwinding output cuts, with additions to the market in May and June.
As investors prepare for increased supply, they also assess other factors that could weigh on the supply outlook.
U.S. President Donald Trump said that Russian President Vladimir Putin was “playing with fire”, and Trump is considering new sanctions against Russia.
This could put Russian energy flows at risk and disrupt the global oil supply.
"The market is better supported in early morning trading today, possibly following comments overnight from President Trump about Russia," ING analysts said in a note.
Moreover, the U.S. and Iran concluded their fifth round of nuclear talks on Tuesday, which saw limited progress, and the disagreement regarding uranium enrichment remained the point of contention.
If they are not able to reach a deal, the U.S. could further pressure Iranian exports, putting a squeeze on the supply.
US bans Chevron from exporting Venezuelan oil - Reuters
The Trump administration has granted Chevron a narrow authorization to retain its assets in Venezuela, including stakes in joint ventures with state oil firm PDVSA, Reuters reported Tuesday, citing three sources.
While Chevron may preserve assets, it cannot operate oilfields, export crude, or expand activities under the new terms, which aim to prevent payments to President Nicolás Maduro’s government, the report said.
Source : Investing