Market News

by Florence Tan, Yusuke Ogawa, Swati Verma, Arunima Kumar and Sudarshan Varadhan

Brent crude futures LCOc1 were down 23 cents, or 0.4%, to $60.52 a barrel at 0940 GMT, while U.S. West Texas Intermediate crude CLc1 was 21 cents, or 0.4%, lower at $57.11 a barrel.

U.S. President Donald Trump said Washington would take control of the country and that the embargo remained in place, after Maduro was detained in a New York jail on Sunday.

In a global market with plentiful oil supply, analysts said any further disruption to Venezuela’s exports would have little immediate impact on prices.

Oil output in the country has plummeted in recent decades amid mismanagement and a lack of investment from foreign firms after Venezuela nationalised oil operations in the 2000s.

Output averaged about 1.1 million bpd last year, or just 1% of global production.

Kazuhiko Fuji, consulting fellow at Japan’s Research Institute of Economy, Trade and Industry, noted also that U.S. strikes had not damaged the South American country’s oil industry.

“Even if Venezuelan exports are temporarily disrupted, over 80% are destined for China, which has built up ample reserves,” Fuji said.

Venezuela’s acting president offered on Sunday to collaborate with the U.S.

“This reduces the risk for an extended embargo on Venezuelan oil exports with oil potentially flowing freely out of Venezuela in not too long,” said SEB analysts.

Trump also raised the possibility of further U.S. interventions, suggesting Colombia and Mexico could face military action if they did not reduce the flow of illicit drugs.

Analysts are also watching Iran’s reaction after Trump threatened on Friday to intervene in a crackdown on protests in the OPEC producer.

Elsewhere, the Organization of the Petroleum Exporting Countries and its allies decided to maintain their output on Sunday.