Crude Prices Tumble on Prospects that Venezuelan Crude Will Continue to Flow

Core Insights - Crude oil and gasoline prices are experiencing downward pressure, with crude oil reaching a two-week low due to the lifting of US sanctions on Venezuelan crude exports and an agreement to supply up to 50 million barrels of sanctioned oil to the US [1] - The global oil market is expected to see an expanding surplus, leading to downward revisions in crude price forecasts by Morgan Stanley for Q1 and Q2 [3] Group 1: Price Movements - February WTI crude oil closed down by $0.81 (-1.42%), while February RBOB gasoline decreased by $0.007 (-0.04%) [1] - Crude oil prices fell after the US lifted sanctions on Venezuelan crude, contributing to a decline in prices [1] - Saudi Arabia's decision to cut the price of Arab Light crude for February delivery for the third consecutive month raises concerns about energy demand, negatively impacting crude prices [2] Group 2: Supply and Demand Dynamics - Morgan Stanley has revised its crude price forecast for Q1 to $57.50 per barrel from $60 per barrel, and for Q2 to $55 per barrel from $60 per barrel, anticipating a peak in the global oil market surplus mid-year [3] - China's crude imports are projected to increase by 10% month-over-month in December to a record 12.2 million barrels per day, indicating strong demand that supports prices [4] - OPEC+ has decided to maintain its production pause in Q1 2026, following a planned increase in December, in response to the emerging global oil surplus [5]