As US equity markets push higher this morning, because that's what they do, WTI Crude prices are sliding back below $50 as Goldman poured cold water on the idea that sanctions of Venezuela will impact prices.
Goldman says U.S. oil sanctions on Venezuela would have little impact on prices.
- A U.S. ban on Venezuelan exports, or imports, would lead to reshuffling of oil trade flows with likely limited impact on prices
- Should ban on U.S. crude imports from Venezuela be implemented, South American country would see further declines in oil revenues by $1.5/bbl given higher freight costs to India and China
- Assuming both import, export bans are implemented and Venezuela further discounts its crude by $1/bbl to incentivize substitution, Brent would need to fall below $34/bbl to make Venezuela’s highest cost blended heavy oil production uneconomical
And traders seem to be listening.
Of course, stocks don't care...
Furthermore, Bloomberg's tanker tracking shows rising exports in Libya and Iran, while Venezuelan shipments decline.
We wil se what tonight's API print says about the 'rebalancing'.