Crude Extends Gains Further

Front month crude is further extending gains with latest support from increased chances that the US will reinstate sanctions on Venezuela, and little hope for a ceasefire in Israel in the short term. Earlier upside was driven by a lower USD spot index, geopolitical tensions in the Mideast and energy infrastructure attacks in Russia

• Brent MAY 24 up 1.6% at 86.79$/bbl
• WTI MAY 24 up 1.8% at 82.05$/bbl
• Venezuela’s opposition candidate Corina Yoris said in a webcast that the country is preventing the opposition from registering a candidate for the elections, which means the US is likely to reinstate sanctions. Eased US sanctions allowed Venezuela to boost crude exports to a four-year high of 660kbd in February according to Kpler – a fourth consecutive monthly increase.
• With a shift away from Iranian condensate, US naphtha emerged as the preferred dilution feedstock, sustaining robust flows into February-March, something that will not be able to sustain if sanctions are reimposed from April 18.
• In addition, reports suggesting that Prime Minister Benjamin Netanyahu has threatened to cancel the planned visit of a delegation to Washington, D.C., if the US does not veto an upcoming ceasefire proposal within the UN Security Council. The Israeli gov't is objecting to the resolution as it does not make a ceasefire conditional on the release of hostages still held by Hamas.