Market Insights > First Look

First Look - Biden administration defends Venezuela sanctions

Oil is trading higher, extending gains from last week
- WTI prices rebounded from oversold conditions last week amid the Federal Reserve interest rate cut
- However, concerns around Chinese demand continue to weigh on the market
Biden administration defends Venezuela sanctions policy (Argus)
- The Biden administration's decision to hold off on new sanctions against Venezuela is supported by Democratic lawmakers, while Republicans critique the benefits to foreign oil companies
- Deputy Assistant Secretary of State Kevin Sullivan indicated that the U.S. is considering diplomatic and sanction options before Maduro's term ends in January
- Following the July 28 election, the Biden administration announced they would not cancel company-specific licenses given to companies to operate in Venezuela, saying that the sanctions helped produce the election in the first place

Natural gas for October was trading 7c higher Monday morning to $2.50 (8:05 AM CT), continuing a move higher that started last Wednesday
- Appalachian gas production dropped over the weekend across multiple pipes, likely tied to the start Cove Point LNG maintenance
- Cove Point is on its fourth day of planned Fall maintenance, which usually lasts about 25 days
- Gas demand could be impacted this week as storm in the gulf is tracking to hit the Panhandle of Florida
The National Hurricane Center is giving Invest 97L a greater than 90% chance of forming over the next seven days
- Many of the weather models have Invest 97 landing near the panhandle of Florida
- Multiple models from the 12z on Sept. 2024 run show Category 4 and Cat 3 intensity
- AEGIS notes that a hurricane in the SE US would decrease power demand in the region
Cove Point LNG enters typical Fall outage for word on the facility
- The facility has historically taken maintenance in mid-late September, lasting through the middle of October
- The outage has lasted anywhere from 21-28 days, where flows into the facility are effectively zero for this time period
- Gas basis in the region can be affected negatively when the about 700 MMcf/d terminal is offline
- Located in Maryland, Cove Point serves as the Northeast’s only major LNG export outlet