Crude oil tumbled after the US Energy Information Administration (EIA) downplayed the effect of Venezualan crisis on the broad oil markets. WTI Crude futures fell nearly 3% to end at 52.50 per barrel as weakness in equiteis weighed further. The counter extended losses today and currently trades at $ 52.20 per barrel, down 0.80% on the day. MCX Crude oil ended at Rs 3727 per barrel, down around 3.8% on the day.
The EIA has noted that the US imports of Venezuelan crude oil have decreased in recent years as production in Venezuela declined. Recently announced US sanctions directed at Venezuela’s energy sector and state oil company, Petróleos de Venezuela, SA (PDVSA), will essentially eliminate US imports of Venezuelan crude oil as the full effects of the sanctions emerge.
However, the US Energy Information Administration (EIA) does not anticipate any significant decrease in US refinery runs as a result of these sanctions. US imports of Venezuelan crude oil have been falling for several years and refineries have been replacing Venezuelan crude oil with other heavy crude oils.