Oil futures: Crude retreats from highs on Venezuela talks, Brent around $112/b
Quantum Commodity Intelligence - Crude oil futures Tuesday were lower amid choppy trading that saw earlier gains wiped out as EU talks on a proposed Russian oil embargo rumbled on, while reports Chevron has been given the green light to resume talks in Venezuela added to the volatility.
Front-month July ICE Brent futures were trading at $112.14/b (1830 GMT), compared to Monday's settle of $114.24/b and down from Monday's high of $115.69/b.
At the same time, June NYMEX WTI was trading $112.13/b, versus Monday's settle of $114.20/b.
The US government is potentially moving to ease some economic sanctions on Venezuela, which would allow Chevron to negotiate its license with state-owned oil company PDVSA, the Associated Press reported, which may signal a softening of oil sanctions on the South American OPEC producer.
Traders continue to eye developments on the latest stage of Russian sanctions, and while talks stalled Monday, an expected decline in Russian exports was seen underpinning prices.
"While an EU ban on Russian oil suffered another setback as Hungary stood firm against it, the bloc is continuing to work on an agreement while Germany is reportedly planning to phase it out regardless, which could be helping to support prices," said Craig Erlam, senior market analyst at Oanda.
Germany said Monday it would press ahead with a ban on imports of Russian oil by the end of this year, even in the absence of an EU-wide embargo on imports, although the EU talks continue.
Hungary has been the main proponent in blocking a full EU ban on Russian oil, saying it potentially needs billions to overhaul its energy industry to operate without Russian crude.
The east European state, regarded as Moscow's closest EU ally, also wants five years to revamp its energy system and for pipeline oil to be exempted from the ban altogether, leaving only maritime shipments covered by the proposed embargo.
Lithuania's foreign minister, Gabrielius Landsbergis, said: "Unfortunately, the whole union is being held hostage by one member state."
Meanwhile, OPEC+ continues to fall further behind on output targets, falling short by some 2.6 mil bpd in April, with Russia producing nearly 1.3 mil bpd below its quota last month.
Monday's news that Shanghai will start relaxing lockdown restrictions from this week helped offset weak oil and economic data released by Beijing.
Retail sales plunged 11.1% in April from a year ago, compared to the 3.5% decrease in March, while industrial production dropped 2.9% last month from a year earlier, marking the worst contraction since February 2020.