WTI moves below $87.00 on US-Venezuela deal
|- Crude oil prices snap the two-day winning streak on US- Venezuela oil deal
- US President’s office could implement relaxation on sanctions of Venezuela's oil and gas sector.
- OPEC stays silent on Iran's proposal for an oil embargo on Israel.
Western Texas Intermediate (WTI) oil price experiences a decline after two days of gains, trading lower around $86.80 per barrel during the Asian session on Thursday. This easing could be attributed to the US-Venezuela deal that would result in an increase in global Crude oil production.
United States (US) is considering exemptions to sanctions on Venezuelan oil exports, which is expected to lead to a significant surge in crude production in the OPEC country. Instead, it could divert barrels from its current primary destination, China.
The US President’s office is reportedly set to implement some substantial relaxation of energy-related sanctions for Venezuela's oil and gas sector in the near term. A senior US State Department official shared this information with Reuters on Wednesday.
American Petroleum Institute released the report of API Weekly Crude Oil Stock for the week ending on October 13, which showed a decline of 4.383M, swinging from the previous stock of 12.94M.
Additionally, OPEC remains unresponsive to Iran's proposal for an oil embargo on Israel, showing no indications of support for such a measure. The conflict in the Gaza Strip is intensifying following a rocket attack on a hospital that resulted in the death of over 500 civilians. Accusations are flying between Israel and Hamas regarding the explosion at the building.
US Dollar Index (DXY) is staging a comeback after recent losses, possibly influenced by economic data from the United States (US) and the escalating situation of the Israel-Hamas military conflict. The spot price beats around 106.50 at the time of writing.
However, dovish remarks from multiple Federal Reserve officials signaled a cautious stance by the central bank. There's a prevailing reluctance to tighten monetary policy amidst the current economic scenario.
The US housing market kept everyone on their toes with mixed signals. Building Permits in September surpassed expectations. Meanwhile, Housing Starts saw a rebound, though slightly below the market consensus, introducing a layer of complexity to the storyline.
Additionally, the Beige Book's observation mentioning "little to no change" in economic activity during September and early October provides a more comprehensive perspective.
Thursday is ready to deliver a significant infusion of economic insights to the US. On the agenda are Existing Home Sales, the Philly Fed index, and the weekly Jobless Claims report, offering a comprehensive examination of various economic aspects.
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