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Business News/ Markets / Commodities/  Oil recovers from 3-week low after US imposes sanctions on Venezuela, Iran; Brent at $87/bbl
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Oil recovers from 3-week low after US imposes sanctions on Venezuela, Iran; Brent at $87/bbl

Oil prices recovered after Venezuela lost a major US license that allowed it to export oil to markets around the world, which would hit the volume and quality of its fuel sales.

Oil prices: Gas flares from an oil production platform, as an Iranian flag is seen in the foreground, at the Soroush oil fields south of the capital Tehran in this file photo. REUTERS/Raheb Homavandi/Files (IRAN - Tags: ENERGY POLITICS)Premium
Oil prices: Gas flares from an oil production platform, as an Iranian flag is seen in the foreground, at the Soroush oil fields south of the capital Tehran in this file photo. REUTERS/Raheb Homavandi/Files (IRAN - Tags: ENERGY POLITICS)

Oil prices were broadly steady on Thursday, April 18, as investors weighed US sanctions on Venezuela and Iran, and robust US jobs data against the wider backdrop of demand concerns and easing Middle East tensions that had pushed prices three per cent lower on Wednesday. Venezuela lost a major US license that allowed it to export oil to markets around the world, which would hit the volume and quality of its crude and fuel sales, according to Reuters.

Also Read: Iran's crude oil output up 20% in 2 years at 3.3% of global supply: What does this mean for the Iran-Israel proxy war?

Brent futures were up 10 cents, or 0.11 per cent, to $87.39 a barrel, while US crude futures were 26 cents higher, or 0.31 per cent, at $82.95 a barrel. Both benchmarks had dropped over $1 at their intra-day lows, touching their weakest in around three weeks. Coming to domestic prices, crude oil futures were up 0.5 per cent higher at 6,969 per barrel on the multi commodity exchange (MCX).

What's affecting crude oil prices?

-The US also announced sanctions on Iran targeting the country's unarmed aerial vehicle production after its drone strike on Israel last weekend. But additional sanctions avoided Iran's oil industry. Iran is the third largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC).

-Earlier in the day, Iran had said it could review its nuclear doctrine in response to retaliatory Israeli threats --extending the ongoing conflict, which could have provided some support to oil prices, according to analysts.

Also Read: UK vs US: Which superpower will first cut interest rates in 2024? Here's what inflation indicates

-The news comes after investors had been largely unwinding the geopolitical risk premium in oil prices in the last three sessions - during which Brent lost around 3.5 per cent - on the perception that any Israeli retaliation to Iran's attack on April 13 will be moderated by international pressure.

-Meanwhile, US jobless claims were unchanged at low levels last week, pointing to continued labor market strength which is driving the economy and postponing the prospect of U.S. rate cuts until September.

-Surging US crude inventories also pressured prices on Wednesday. Oil inventories rose by 2.7 million barrels to 460 million barrels in the week ending April 12, said the Energy Information Administration, nearly double analysts' expectations in a Reuters poll for a 1.4 million-barrel build.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 18 Apr 2024, 10:11 PM IST
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