Venezuelan crude constraints leave 2.2% odds of oil all-time high by September 30

  • Analysts say Venezuelan crude cannot quickly replace disrupted global oil supplies.
  • 2.2% is the market-implied probability of a new crude high by September 30.
  • Market participants are watching Strait of Hormuz developments and Venezuelan production capacity.

Venezuelan crude production has risen to about 1.2 million barrels per day, but analysts say the oil’s complex extraction and refining requirements limit its ability to quickly replace supplies disrupted by tensions in the Strait of Hormuz. The increase is also insufficient to offset major disruptions elsewhere, potentially keeping pressure on global oil prices. Market pricing now puts the probability of crude reaching a new all-time high by September 30 at 2.2%, a decline from recent levels. Participants will watch developments around the Strait of Hormuz, Venezuelan production capacity, OPEC decisions and announcements from major energy officials. A resolution to geopolitical tensions or an unexpected production increase in Venezuela could change market dynamics, while pricing shifts may indicate changing expectations for new crude highs by the end of the year.

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Venezuelan crude constraints leave 2.2% odds of oil all-time high by September 30 - CoinPost Terminal