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Blue Lacy Advisors, LLC - Final November Crude Oil Market Commentary

Minneapolis, MN | December 9, 2022 | By: Steve Sinos, Blue Lacy Advisors, LLC

Crude Oil

If there is a silver lining to the war in Ukraine, it can be found in the consideration that US leaders are forced to give sanctioned nations with resources the world needs. Over the last 10-20 years, it has been rare to make up any lost ground politically with the so-called bad actors on the sanctioned list. Last week, though, Chevron was granted a license to collaborate with Petróleos de Venezuela S.A., known commonly as PDVSA, to produce and export oil from Venezuela. It’s unlikely that this owes any credit to positive developments within the US or Venezuela’s political sphere. Its value is the leverage it gives the US and its allies to squeeze Russia without unduly punishing the world that is short of oil in the long term. The restart is expected to bring a substantial flow of heavy crude to the US Gulf Coast into refineries specifically built to take this grade, including assets owned and/or formerly owned by Chevron and Citgo (in which PDVSA owns a majority stake). The license has a variety of limitations that may slow the pace at which production can recover. Still, Chevron was reported to target 800 kbd by March 2023, fully replacing barrels the US had previously imported from Russia.

*This summary is based off November 27, 2022

A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


Meet the Author!

Phone: +1-832-413-3124

Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.

He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.

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