Crude Lower As Sanctions Lifted On Venezuela, Biden Speaks Later

Oil prices are down slightly but are off their intraday lows. WTI is down 0.3% to $86.99/bbl (Dec contract) after a low of $86.60. Brent is 0.5% lower at $91.05 following a trough of $90.63. Risk appetite deteriorated further today over significant uncertainties in the Middle East. The USD index is 0.1% higher.

• The US has suspended some sanctions on Venezuelan oil but also gas and gold and issued 6-month licenses. They will only be renewed if the country meets its election commitments and releases political prisoners. This should result in an increase of around 25% to over 200kbd but there is uncertainty over how quickly Venezuela can boost production, according to Bloomberg. In 2019, exports to the US were almost 365kbd double what they were last month. The timing is important given rising tensions in the Middle East, sanctions on Russian crude and the 2024 US elections.
• US President Biden is due to speak later on the situation in Israel/Gaza which is likely to be another attempt to prevent the conflict spreading in the region. The oil market remains tight and appears to be in a holding pattern waiting to see if the situation deteriorates.
• Later there are more Fed speakers including Chairman Powell but also Jefferson, Goolsbee, Barr, Bostic, Harker and Logan. On the data front there are US jobless claims, October Philly Fed and September existing home sales.