On Tuesday, both US and UK crude oil futures’ prices faltered as much as 2 per cent after rising to a seven-week peak earlier in the session following release of a media headline that broke off the US could ease some restrictions on oil imports of Venezuelan state-backed oil firm PDVSA.
Aside from that, crude oil prices lost momentum further following worrisome comments from the US Fed Chair Jerome Powell, who was quoted saying earlier in the day that the world’s largest economy would have to feel the heat in the process of bringing the inflation down.
On top of that, supporting an ultra-hawkish US Fed policy stance, Powell said that the Central Bank would continue to tighten up the US monetary policy until a clear sign becomes visible that the inflation is waning. Nevertheless, the media headline revealing a recent development on a lift of US ban on Venezuelan crude, had stoked possibilities of an increase supply.
A press agency report was quoted saying earlier in the day that an incumbent Biden Administration was looking to authorize Chevron Corp to negotiate with the Government of Nicolas Maduro in a bid to bring the gasoline prices down.
On last Friday, US petrol pumps had witnessed a record gasoline price of $4.432 per gallon.
Crude oil falls after development on talks over sanction on Venezuelan crude
Citing statistics, in the day’s commodity market wind-down, UK crude tottered 2 per cent to $111.93 a barrel, while US WTI (West Texas Intermediate) crude oil futures’ prices were slumped 1.6 per cent to $112.40 per barrel.
Though, earlier in the day, UK crude contracts were trading above a seven-week peak of $115 per barrel. Meanwhile, adding that the downfall in the day’s crude oil futures’ prices has been a conventional supply-demand narrative, an analyst at City Index Fawad Razaqzada said, “Ultimately, this is a supply-side story.
Unless the OPEC and its allies ramp up production and fast, it is difficult to see how prices can go down meaningfully”.