The Treasury Department of the United States placed sanctions on Venezuela’s state-owned oil company Petroleos de Venezuela, S.A (PDVSA) on January 28 in an effort to stabilize democratic order to the region and combat corruption in Venezuela.
On December 26th NYMEX low traded at $1.6205 per gallon. Since then, the price has moved higher to $0.27 per gallon moving ever closer to the $2.00 mark.
Brent crude Oil prices hit a two-month high near $64 a barrel as OPEC led supply cuts and U.S. sanctions against Venezuela's oil exports brightened the supply outlook, but prices fell back on uncertainty about prospects for the global economy.
The United States sanctions against Iran’s oil exports entered into full force last week as the United States attempts to cripple Iran’s oil-dependent economy and suppress their nuclear desires. Although Washington has vowed to halt all purchases of crude from Iran, it recently supplied eight countries with waivers to continue imports without penalty for the next 180 days. While President Trump views this as a way to stabilize any fear of global price spikes, Iranian President Hassan Rouhani believes the United States had no choice but to grant the waivers and Iran has publicly stated they will continue to export as much oil as needed. However, one thing to be cognizant of is, how will Iran ship their product?
Since the start of November, the two-year bull-run in the energy sector is facing one of its biggest challenges. Within the oil market universe, there are growing concerns of a global economic slowdown and oil demand following suit as the continued price collapse, almost 15%, from its October highs.