Oil Prices Stabilize Amid Middle East Uncertainty and Venezuela Sanctions Talk
Oil Prices Find Stability After Previous Selloff
Oil prices have steadied after experiencing a selloff in the previous session. Traders are closely monitoring developments in the Middle East and the potential for additional supply from Venezuela. As of 09:20 ET (13.20 GMT), futures traded 0.1% lower at $85.23 a barrel, while the contract dropped 0.1% to $89.62 a barrel.
Biden’s Visit to the Middle East
U.S. President Joe Biden is scheduled to visit the Middle East later this week in an effort to contain the regional escalation of Israel’s war with Hamas. Biden’s departure on Tuesday comes amidst reports that Jordan will host a four-party summit in Amman on Wednesday. The U.S. President, along with Egyptian and Palestinian leaders, is expected to discuss the “dangerous” repercussions of the war in Gaza for the region. This summit has temporarily halted the situation, delaying concerns of an Israeli ground invasion into Gaza and the potential involvement of other regional countries and groups.
Potential Easing of Venezuela Sanctions
On Monday, both oil contracts experienced a drop of around $1 a barrel following a Reuters report suggesting that the United States had reached a preliminary deal with Venezuela to ease sanctions on its oil exports. However, this easing of sanctions would only come into effect if Venezuela’s government, led by President Nicolas Maduro, returns to political negotiations with the country’s opposition. The U.S. government has imposed sanctions on Venezuela’s oil exports since 2019 as a response to highly-disputed elections in 2018. With the aim of increasing the flow of oil to world markets and alleviating high prices, the U.S. government is exploring ways to ease these sanctions.
Positive U.S. Retail Sales in September
Economic data released on Tuesday revealed that U.S. retail sales exceeded expectations in September, indicating that the largest economy in the world, and the biggest oil consumer, ended the third quarter on a strong note. However, this positive data could provide the Federal Reserve with more reason to increase interest rates before the year ends. The Federal Reserve has been facing inflation concerns, which could potentially weigh on economic activity in the future. Retail sales rose 0.7% last month, surpassing the expected growth of 0.3%. Additionally, data for August was revised higher, showing sales advancing 0.8% instead of the previously reported 0.6%.
China’s Third-Quarter Data Release
China, the world’s largest oil importer, is set to release its third-quarter data later on Tuesday. Growth is expected to have deteriorated further throughout the quarter. This data will provide insights into the economic activity in China, which has significant implications for global oil markets.
(Ambar Warrick contributed to this article.)
