The oil will strengthen the sanctions rhetoric of Washington
In early trading on Monday, Brent tried to build on Friday’s correction, but managed to hold above the 78 level and is back into positive territory in the area 79,50. According to the results of trading day the barrel up almost 1%.
The new driver for the energy market was the situation with Venezuela. On the background of the economic crisis, the production of black gold in the country of the OPEC has fallen to its lowest level since 1950-ies levels, and the situation seems only to get worse – Washington Latin American economy faces severe sanctions after the victory of Maduro in the elections that were held last Sunday.
Reminded of himself and the Iranian factor. In the administration of the trump recalled that the sanctions against Tehran will be the toughest in history, if the country does not change its political course.
At this stage, the market is winning back the prospects of reduced exports from these two countries with optimism. But on the other hand the threat of further supply reduction now, when the world market to the equilibrium state, may reduce the need for extension of the transaction OPEC+. We will remind, the decision on this question will be taken next month in Vienna.
In the short term, Brent crude may continue to move in the direction of level 80, getting also feeding on the background of reduction of geopolitical tensions in the context of trade relations between the US and China. Improvement on this front contributes to the growth expectations of demand growth.
Analyst social network for investors
ecogov Russia and the CIS