[MARKET ANALYSIS] Crude benchmarks fall following the US strike in Venezuela over fears of further oil barrels being added

Crude benchmarks have continued to trade lower following a choppy APAC open due to the US strike on Venezuela, capturing President Maduro with the intention to prosecute over narco-terrorism charges. In addition to the capture, US President Trump commented that they are going to run Venezuela and “get oil flowing like it should be”. This hints of further addition of oil into an already-oversupplied market, causing Brent to fall to USD 60/bbl. See the headline feed for a detailed explanation of the situation in Venezuela.
JPMorgan estimates Venezuelan output could rise to ~2.5mln bpd over the next decade from around 0.8mln bpd currently, but near-term exports remain uncertain amid the political transition and questions over flows to China.
Goldman Sachs also sees long-term upside to Venezuelan production, which could weigh on global crude prices over time, noting the country’s sharp output decline over the past two decades.
WTI and Brent dropped c. USD 1.00/bbl at the start of the APAC session, troughing at USD 56.56/bbl and USD 60.00/bbl respectively, before sharply reversing the losses immediately. As APAC trade continued, benchmarks returned to the initial low made and as the European morning got underway, extended on earlier losses. Thus far, WTI and Brent are trading at USD 56.60/bbl and USD 60.05/bbl.
Elsewhere, OPEC+ agreed to keep the group's output unchanged as expected at its meeting on Sunday.