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Oil Prices Surge Over Venezuela Oil Crisis

Published 07/06/2018, 15:19
Updated 07/06/2018, 15:25
© Reuters.  Oil was higher on Thursday.
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Investing.com - Oil prices rose on Thursday, amid concern of output decline from Venezuela.

Crude oil futures increased 1.41% to $65.64 a barrel as of 10:18 AM ET (14:18 GMT). Meanwhile Brent crude futures, the benchmark for oil prices outside the U.S., surged 1.46% to $76.45.

Venezuela is nearly a month behind on delivering crude to customers, according to Reuters. The country is in the midst of an economic crisis and faces threats of U.S. sanctions.

Meanwhile the Organization of the Petroleum Exporting Countrie and Russia, which Venezuela is part of, is considering raising its supply output.

Reuters reported May 25 that the group was considering raising supply by one million barrels per day as early as June, as the organization faces losses from Venezuela and Iran.

The organization is set to meet in Vienna on June 22. OPEC has been cutting crude output by 1.8 million barrels per day (bpd) to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018.

Prices were held back slightly by concern that the U.S. is increasing production. U.S. oil inventories rose by 2.1 million barrels in the week to June 1 to 436.5 million barrels, the Energy Information Administration said. Analysts had forecast a decline of 2.0 million barrels.

Domestic oil production - driven by shale extraction – hit a record of 10.8 million barrels per day (bpd), according to the EIA's weekly report. Only Russia currently produces more, at around 11 million bpd.

In other energy trading, Gasoline RBOB Futures increased 0.49% at $2.0892 a gallon, while heating oil rose 1.35% to $2.1555 a gallon. Natural gas futures was up 2.14% to $2.958 per million British thermal units.

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