Oil extends gains amid lingering Venezuela and Russia tensions
The WTI prompt-month contract rose $0.37 to $56.31/Bbl early Thursday (7:45 AM CT)
In remarks from the White House, President Trump did not directly address the announced blockade on Venezuela
Venezuela currently accounts for less than 1% of global oil supply
Bloomberg reporting indicates Venezuelan storage sites and tankers are filling rapidly, raising the risk of production shut-ins if capacity constraints are reached
Analysts note that any sustained disruption to Venezuelan exports would likely have a greater impact on Chinese refiners than on the broader global market
The US is also signaling another round of sanctions targeting Russia’s energy sector
Previous measures aimed at companies such as Rosneft and Lukoil failed to generate a meaningful or lasting response in crude prices
Russian tanker flows redirected as India steps back (Bloomberg)
Cargoes of Russia’s Urals crude are increasingly accumulating off China as Indian buying slows under the weight of US sanctions
As of Wednesday, at least five vessels carrying roughly 3.4 MMBbls were idling in the Yellow Sea, marking the highest volume for the grade in the region in more than five years
To clear barrels, Russian sellers have reportedly discounted Urals crude into China to levels below comparable Iranian grades, attracting interest from independent refiners in Shandong
Natural gas extends gains for a second day
The January Henry Hub contract is higher again this morning, after climbing 14c yesterday
Prompt prices are up about 30c from lows set on Tuesday near $3.84/MMbtu
The EIA will release its weekly natural gas storage report today, with a median expectation of a -176 Bcf withdrawal, according to the Bloomberg survey
This should materially reduce the storage surplus to the five-year average, which currently stands at +103 Bcf
Gas production continues to average about 108 Bcf/d
DOE grants extension to Louisiana LNG (S&P)
The Department of Energy has granted Woodside an extension to begin exports from the planned Louisiana LNG
The extension is in line with Woodside’s target for starting production in 2029
The plant will have a liquefaction capacity of 2.2 Bcf/d once all trains are fully operational
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