Oil prices drop after report that EU may be able to skirt Iran sanctions

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January 23, 2019 12:53pm NYSE:USO

Oil Prices

From Myra P. Saefong: Oil futures turned sharply lower on Wednesday afternoon.

The European Union is set to launch a mechanism that would facilitate non-dollar trade with Iran, bypassing U.S. sanctions, Reuters reported Wednesday, citing comments from diplomats. That launch of the mechanism would allow the EU to “skirt” U.S. sanctions, but “that may be offset by reports that the Trump administration is telling energy companies that they should get prepared for sanctions on Venezuela,” said Phil Flynn, senior market analyst at Price Futures Group. The Trump administration “could impose Venezuela oil sanctions as soon this week if the political situation there deteriorates further,” Reuters Venezuela tweeted Wednesday, citing sources. Prices had been stuck in a tight trading range before the move lower. March West Texas Intermediate oil CLH9, -1.43% fell 94 cents, or 1.8%, to $52.07 a barrel on the New York Mercantile Exchange. March BrentLCOH9, -1.33% traded at $60.45 a barrel, down $1.05, or 1.7% on ICE Futures Europe.

The United States Oil Fund LP (USO) was trading at $10.95 per share on Wednesday afternoon, down $0.17 (-1.53%). Year-to-date, USO has declined -8.83%, versus a -1.63% rise in the benchmark S&P 500 index during the same period.

USO currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 108 ETFs in the Commodity ETFs category.

This article is brought to you courtesy of MarketWatch.

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