Crude oil WTI hit 72.83 new 2018 high on Venezuela

Crude oil West Texas Intermediate benchmark (WTI) is trading at around 72.44 virtually unchanged on Tuesday. 

Crude oil found an intraday floor at 72.24 in the American session and has extended the uptrend to prices not seen since November 2014. The market is now in consolidation mode in the 72.40 region. 

Black gold prices are supported by impending sanction on Iran by the US, which can lead to a supply squeeze of up to 500,000 barrels per day according to analysts. On the other hand, Venezuela is in the midst of a deep crisis and its oil production tanked to a 70-year low. In addition, incumbent President Nicolas Maduro has been re-elected for another six-year term on Sunday and the US imposed fresh new sanctions on Venezuela on Monday.

"The U.S. came out with more sanctions overnight, not necessarily directly on oil, but again it just cripples their industry more and more. No major wants to operate there because they don't have personnel, equipment … it's a shambles," commented Amrita Sen, chief oil analyst at Energy Aspects.

It has been reported that the new sanctions on Caracas were aimed at blocking Maduro from selling off government debt for his own personal profit. 

Meanwhile, PDVSA (Petróleos de Venezuela, S.A., the Venezuelan state-owned oil and natural gas company) has lost control of its refining and storage assets in the Caribbean to ConocoPhillips, US exploration, and production company.

Later in the day, the API data can trigger some short-term moves in crude but is unlikely to be a major market-mover. The data is the fore-runner of the most popular EIA numbers on Wednesday. 

Crude oil WTI 4-hour chart

The main trend is bullish with the market trading above the 50, 100 and 200-period simple moving averages on the 4-hour time frame. Resistances are priced in at 72.83 high of 2018 and at 73.00 and 74.00 handle while supports are seen at the 71.89 and 70.85 swing lows.