WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange moved sharply lower Monday afternoon, reversing down from last week's three-month highs in opening week trading following U.S. President Donald Trump's criticism of Organization of the Petroleum Exporting Countries' policy aimed at tightening the global oil market.
Oil futures tumbled more than 3% at market close, pressured by an early Monday morning tweet from Trump urging OPEC to "relax and take it easy" because the "fragile" world cannot take a price hike.
Trump has not weighed in on OPEC policy of price management since early December when he unsuccessfully pushed the cartel against the production cuts, which are now in place for two months.
The message comes after oil prices rallied for almost a month amid the fresh round of price-boosting output curbs from OPEC and 10 other oil-producing nations. The group will meet again in mid-April to review the deal, which is scheduled to last through the first six months of 2019.
The latest uptrend in oil prices has also been partly attributed to U.S. sanctions on Venezuela's state owned oil company PDVSA, which has disrupted global crude flows. The situation in Venezuela intensified over the weekend, with the nation's opposition leader Juan Guaido calling on the international community to consider the use of military force against President Nicolas Maduro.
U.S. Vice President Mike Pence announced sanctions against several border-state governors that are believed to have been involved in blocking shipments of humanitarian aid from reaching Venezuelans over the weekend. Pence, who delivered his speech in Bogota, Colombia, Monday afternoon, said that "it is time for actions against Maduro regime." Echoing the vice president, Secretary of State Mike Pompeo said that Maduro's regime days are "numbered" and that every option is on the table, including the prospect of military intervention.
Crude exports from Venezuela are down about 100,000 barrels per day (bpd) since U.S. announced sanctions against the OPEC nation in late January.
In Libya, the chairman of National Oil Company declined to resume production at the country's Al-Sharara oil field, citing continued presence of armed militia on the premises. According to Reuters, the Libyan National Army, a militia that seized control of the field in early December, failed to meet a new security arrangement to guarantee safety for its workers. Al-Sharara is the country's largest oil field that normally produces 315,000 bpd—nearly a third of Libya's total output, with no clear path for when production would resume. The North African country has been torn between rival administrations, myriad militias and jihadist since the overthrow and killing of Dictator Muammar Gaddafi in 2011.
Nymex April West Texas Intermediate futures settled down $1.78 at $55.48 barrels (bbl), shedding 3% on the session, while ICE April Brent crude settled down $2.36 at $64.76 bbl. The May contract held a $0.15 bbl premium to April delivery. Nymex March ULSD futures settled down 5.65 cents at $1.9746 gallon, down sharply from a $2.0311 three-month spot high settlement on Friday. Nymex March RBOB futures reversed from a $1.6112 better than three-month settlement high on Friday to settle down 6.60 cents at $1.5452 gallon.
Liubov Georges can be reached at email@example.com
© Copyright 2019 DTN/The Progressive Farmer. All rights reserved.