Oil rises after US reimposes Venezuela sanctions

Oil drilling rigs

Oil prices rose today, April 18, after the United States reimposed sanctions on Venezuela following the government's failure to hold free and fair elections.

Brent crude was trading up 0.19% at $87.46 a barrel, at 09:06 am Makkah time. West Texas Intermediate (WTI) crude was trading at $82.75 a barrel.

Both contracts lost nearly 3% in the previous session amid demand concerns, as expectations are rising for continued tightening of US monetary policy for an extended period. In addition, concerns remain on the risks related to the faltering recovery of the Chinese economy.

The US administration said on April 17 that it does not intend to renew a license (which expires today) that has contributed to easing sanctions on the oil sector in Venezuela. It also reimposed measures, it described as punitive, in response to the administration’s failure to fulfil the pledges related to the elections, Reuters reported.

The Federal Reserve’s Beige Book poll, released on April 17, showed that US economic activity expanded slightly in the period from the end of February to the beginning of April, with the companies surveyed indicating that they expect inflationary pressures to stabilize.