US Gives Chevron Green Light to Expand Venezuelan Oil Production
November 28, 2022
Energy market are down to start today as the situation in China concerns the market about demand. Also, the discussions about the Russian oil price cap also continue to swirl in the market creating uncertainty.
Protest in China against the country’s COVID Zero policy has rallied the US dollar and put selling pressure on commodities. Crude prices are off as these events worry the market about demand for crude oil as demand remains weak and recession fears could make it worse. WTI crude oil price are now down near levels the market has not seen in almost a year.
The US government has given oil major Chevron a license to expand oil production in Venezuela and bring that production to the US. Venezuela produces heavy crude oil which most refineries in the US process, so this will be helpful. This will allow Chevron to get some of the money back it has spent in the country over years and that it is owed by PDVSA, Venezuela National Oil Company.
“Differentials are confirming what outright prices have been implying there is a demand deficit and or a supply surplus, “ said Tamas Varga of oil broker PVM.
Baker Hughes reported that a total of 1 crude oil rig came online last week in the US up to a total of 623 rigs. Last year at this time the US had only 461 oil rigs.