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Oil rallies to multi-year highs on Venezuela worries

22 May 2018 02:31 (UTC +04:00)

U.S. crude hit its highest level since 2014 on Monday amid rising concerns that Venezuela’s oil output could fall further following the country’s presidential election and potential sanctions on the OPEC-member nation, APA reports quoting Reuters.

Prices firmed further as U.S. President Donald Trump had discussions with Russia and China about issuing new debt to Venezuela. Trump signed an executive order on Monday restricting Venezuela’s ability to liquidate state assets, a senior administration official told reporters.

Any restriction on Venezuela’s financing, logistics or power supply could further depress the country’s crude output.

“It’s been going down for a bit, but there is an expectation that the decline will accelerate,” said Jamie Webster, senior director of the Center for Energy Impact at the Boston Consulting Group. “There’s increasingly a view that this could be as bad as Libya was in its worst days - that production could fall to a very small percent of what it is capable of doing.”

U.S. crude futures settled 96 cents, or 1.4 percent, firmer at $72.24 a barrel, after touching $72.33, the highest since November 2014. In post-settlement trade, the benchmark hit a fresh 3-1/2 year high at 72.41.

Brent crude futures gained 71 cents, or 0.9 percent, to settle at $79.22 a barrel.