Crude oil prices pared early gains and settled notably lower on Tuesday, reacting to reports that the Biden administration is set to ease some of the sanctions imposed on Venezuela.
West Texas Intermediate Crude oil futures for June ended lower by $1.80 or about 1.6% at $112.40 a barrel, after having climbed to a seven-week high at $115.56 a barrel earlier in the day.
The U.S. government is reportedly moving to ease a few economic sanctions on Venezuela in a gesture meant to encourage resumed negotiations between the U.S.-backed opposition and the government of President Nicol?s Maduro.
The Treasury Department has issued a “narrow license” authorizing Chevron to negotiate on “potential future activity” in Venezuela, the officials said. However, the company is not allowed to enter into any agreements with Venezuela’s state-owned oil company, PDVSA.
Markets now look ahead to weekly inventory reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA), due later today and Wednesday morning, respectively.