Home / Business / Oil price drops, as shell construction in the US outweighs the turbulence in Venezuela

Oil price drops, as shell construction in the US outweighs the turbulence in Venezuela

The oil price fell early Wednesday after the API announced on Tuesday a startling US shell that outweighed the previous bullish news of a coup attempt in Venezuela and Saudi Arabia, suggesting that the OPEC + pact would remain open until the end of the coup Conclusion could be extended in some form

From 8:58 am EDT on Wednesday, before the weekly inventory report of the EIA, WTI crude dropped by 0.75 percent to $ 63.43, while Brent Crude fell by 0.33 percent Energy Minister Khalid al-Falih said in an interview with Russian news agency RIA Novosti that the OPEC + production cut could be extended by the end of the year from its current expiration date in June 2019 to $ 71

.82. However, Al-Falih reiterated that this was indeed the case. Details on production levels and quotas were projected early.

Also on Tuesday, oil prices were helped by the escalation of the situation in Venezuela's OPEC member, where opposition leader Juan Guaidó played a part In some factions of the military, an attempt was made to topple Nicolas Maduro.

These two bullish factors were wiped out later Tuesday morning when the American Petroleum Institute (API) announced a startling construction of 6.81 crude oil inventories for millions of barrels for the week ending April 26 and analysts expected Stocks were increased by 2.093 million barrels.

"Exceeding expectations has hurt the market, resulting in a significant reversal in the market yesterday's earnings following comments by the Saudi oil minister that OPEC + could continue its deal by the end of this year while the market is still in place largely ignored the growing unrest in Venezuela, "said Warren Patterson, head of commodities strategy for ING, on Wednesday.

Regarding Venezuela, ING believes: "Regime change could lead to increased oil production in the longer term, but could also mean short to medium term disruptions, while we believe that the state of the domestic oil industry will not be a quick fix even with a new regime.

By Tsvetana Paraskova for Oilprice.com

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