Market Report & Analysis for 4/19/2019 Morning Edition

Morning Market Overview

Oil futures nearest delivery on the New York Mercantile Exchange and Intercontinental Exchange Brent crude reversed higher on Thursday, supported by an unexpected draw in U.S. crude inventories amid tightening global oil supply.

Oil futures were fractionally higher following federal data Wednesday that showed U.S. crude oil inventories fell by 1.4 million bbl during the week ended April 12, the first decline in four weeks. Energy Information Administration data also showed gasoline supplies continued lower for a ninth straight week, down 1.2 million bbl though implied gasoline demand slumped to 9.420 million bpd, 4.2% below a year ago.

Oil futures continue to draw support from ongoing production cuts from the Organization of Petroleum Exporting Counties as well as U.S. sanctions against Iran and Venezuela. Reuters reported Spain’s Repsol suspended all fuel shipments to Venezuela to circumvent potential violations of the U.S. sanctions.

The Spanish oil company was one of Venezuela’s main fuel suppliers alongside with Russia’s Rosneft and India’s Reliance Industries. According to the report, Repsol has been swapping fuel with Venezuela in exchange for crude oil, even as the United States slapped sanctions on the OPEC member. Repsol’s decision to halt all transactions comes as Venezuela struggles to get the crude out of the country due to repeated blackouts that shut down the main export terminal of Jose.

According to the report, a group of 11 loaded tankers have lingered off the Port of Jose for over two months following payment complications from U.S. sanctions.