Oil Extends Losses As Venezuela Capitulates And U.S. States: "We're Not Stealing Anyone's Oil."

Meanwhile, Canada tries to stay relevant on the world stage: File Image/Pixabay

Oil on Wednesday extended its losses as news and speculation over the U.S. increasing its control over Venezuela continued, the latest development of which concerned a deal between Washington and Caracas to reroute between 30 and 50 million barrels of stored crude to American shores rather than China.

Brent settled down 74 cents to $59.96 per barrel, while West Texas Intermediate settled down $1.14 to $55.99 per barrel.

Oil trading was also influenced by the U.S. seizure of the Venezuela-linked Bella-1 after it slipped through a maritime blockade of sanctioned tankers two weeks ago – a move critics warn could anger Russia.

While pundits noted that Trump's end game for Venezuela was to lessen China and Russia's presence in that country and bring about a more amenable government, crude analysts worried about an uptick in sales of Venezuelan barrels creating more downward pressure on prices and contributing to what they think is an oncoming global glut.

Meanwhile, according to a fact sheet released by Washington's Department of Energy, the U.S. is working with banks and commodity houses to execute trades – as well as dispatching lighter grades of domestic oil to "upgrade and optimize" Venezuela's crude and rolling back some sanctions against the South American country.

All of this meant one thing to a specific country, namely, Canada: there, critics noted that Canadian barrels required to meet Gulf Coast heavy crude runs were being displaced by the sudden takeover of Venezuela's assets.

B.C. premier David Eby called on Ottawa to prioritize building refineries rather than pipelines, arguing it would keep more value at home, reduce reliance on U.S. buyers, and cut exposure to global supply disruptions; critics countered that Canada could spend tens of billions of dollars only to run up against softer demand or competition from newer, lower-cost refineries in the Middle East and Asia.

Back in the U.S., Energy Secretary Chris Wright on Wednesday explained the goal of his country's seizure of Venezuelan crude to media: "We're going to market the crude coming out of Venezuela – first this backed-up stored oil and then indefinitely going forward we will sell the production that comes out of Venezuela."

Wright added, "We're not stealing anyone's oil; we're going to restart the selling of Venezuelan oil on global crude markets, put it in accounts in the name of Venezuela and bring those funds back into Venezuela for the benefit of the Venezuelan people."