Oil prices fall with expectations of easing sanctions on Venezuelan exports

Oil futures fell by more than a dollar a barrel on Monday, as expectations increased that the United States will soon reach an agreement with Venezuela easing sanctions on its crude oil exports.
Traders said that the conflict between Israel and the Palestinian Islamic resistance movement “Hamas” does not seem to threaten oil supplies in the short term, and that the ongoing war in Gaza is still concentrated so far in the Strip, according to CNBC Arabia.
Brent futures fell 1.24 dollars or 1.4% to 89.65 dollars per barrel on settlement, while WTI futures fell 1.03 dollars or 1.2% to 86.66 dollars per barrel.
The Venezuelan government and opposition said they would resume political negotiations this week after a hiatus of about a year, while sources said the United States had reached a preliminary agreement to ease sanctions on the Venezuelan oil sector in exchange for a competitive, controlled presidential election in the Latin American country next year.
“The reported agreement will help lift the country’s oil production from very low levels,”said William Jackson, chief emerging markets expert at Capital Economics.
“But the sector requires huge investments to restore production to 10-year-old levels, this will not significantly affect the deficit in the global oil market in the near term,”he added.
Both crude oil prices rose by about 6% on Friday, the largest daily percentage rise since April, as investors took into account the widening scope of the conflict in the Middle East.
During the week, Brent made record gains and rose 7.5%, its biggest weekly rise since February, while WTI rose 5.9%.
“As of Monday, the containment of the impact of the conflict in the Middle East on crude oil supplies remains successful,”said John Kilduff, partner at agin capital.
Israel intensified its airstrikes on Gaza today after diplomatic efforts by the United States to arrange a ceasefire in the southern Gaza strip failed.
Russia has also entered the diplomatic fray, with President Vladimir Putin due to hold talks with Iran, Israel, the Palestinians, Syria and Egypt.