A major disruption in Venezuela could be a game-changer.
The OPEC member has already seen its output drop 50 percent in five years as a spiraling economic crisis takes its toll on the oil industry. Even without new U.S. sanctions, Venezuela’s production -- currently about 1.2 million barrels a day -- may lose a further 300,000 to 500,000 barrels a day, RBC Capital Markets estimates.
Internal conflict could result in a much bigger and longer-lasting disruption. Even if Maduro’s government is replaced, “the road back for Venezuela will be extremely arduous given the depths of the economic and humanitarian crisis,” Tran and fellow RBC analyst Helima Croft wrote in a note.
Other oil-market news
Gasoline prices gained 0.4 percent to $1.3936 a gallon. China’s largest refiner said its trading unit ost almost $700 million last year after being wrong-footed by zigzagging markets. The discount between oil from the Permian shale basin and crude sold on the U.S. Gulf Coast has shrunk to the lowest level in almost a year as a pipeline shortage starts to clear.
This article was provided by Bloomberg News.