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View all search resultsOil extends losses as Trump flags Venezuela shipments
Crude has seen wild swings since the US president ordered the toppling Saturday of Nicolas Maduro, his counterpart in Caracas, and said Washington would run the country while demanding "total access" to its key resource.
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An oil pumpjack operates at dusk Willow Springs Park in Long Beach, California on April 21, 2020, a day after oil prices dropped to below zero as the oil industry suffers steep falls in benchmark crudes due to the ongoing global coronavirus pandemic (AFP/Apu Gomes )
O
il extended losses Wednesday after Donald Trump said Venezuela would turn over millions of barrels to the United States, while equities were mixed after a record-breaking start to the year.
Crude has seen wild swings since the US president ordered the toppling Saturday of Nicolas Maduro, his counterpart in Caracas, and said Washington would run the country while demanding "total access" to its key resource.
But both main contracts sank more than one percent Wednesday -- having lost 1.7-2.0 percent Tuesday -- after Trump announced the latest development.
"The Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America," he wrote on his Truth Social platform.
"This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States."
Analysts said the shipments lowered the risk that Caracas would have to cut output owing to its limited storage capacity, easing supply concerns, but added that the outlook for the commodity was lower prices.
That comes as the crude market remains well stocked after OPEC+ agreed to boost output.
Venezuela sits on about a fifth of the world's oil reserves, but observers pointed out that a quick ramp-up of output would be hamstrung by several issues including its creaking infrastructure, low prices and political uncertainty.
Equity markets fluctuated after a strong start to the year that has already seen Seoul following London and New York in hitting record highs thanks to the relentless rush into all things artificial intelligence.
South Korea's Kospi index continued its run-up Wednesday, while Shanghai, Sydney, Wellington, Manila and Jakarta also rose.
However, Hong Kong sank more than one percent with Singapore, Taipei and Mumbai also off. Tokyo shed more than one percent after China imposed tougher export controls on products sent to Japan with potential military uses.
Bangkok was flat.
Still, despite rising geopolitical tensions, analysts remain upbeat about the outlook for equities this year.
"Participants remained squarely focused on what remains a robust bull case of resilient economic growth and robust earnings growth, largely in keeping with that which powered the market higher last year," wrote Michael Brown at Pepperstone.
He pointed to "expectations for considerably looser monetary and fiscal backdrops through the next twelve months".
"My view remains that the 'path of least resistance' continues to lead to the upside, and that any dips -- were they to occur -- continue to represent buying opportunities."
