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Expand chart
Data: EIA; Chart: Andrew Witherspoon/Axios

Oil prices have been rising this week. But here's the more interesting thing: they're not going bananas these days, not at all, despite a good dose of geopolitical turbulence and market intervention, including U.S. sanctions.

The big picture: Prices are up in recent days (Brent is pushing $62 per barrel and WTI is above $54), but they're still more than $20 below the elevated early-October levels, which were four-year highs.

Why it matters: It's a sign of an oil market that has been transformed by the rise of U.S. shale production and other forces. Center for Strategic and International Studies analyst Sarah Ladislaw summed things up in a tweet yesterday...

"Just wanted to point out that we are living in a scenario where the U.S. is sanctioning Venezuelan crude oil exports (effectively) and Iranian oil exports, OPEC is cutting, Alberta is curtailing, and oil price today is still around $60/54 (brent/WTI)."

The intrigue: I chatted with Ladislaw about why this is happening, when it really should be a cocktail for very high prices right now.

  • "We are in a time where there is a lot of market intervention for geopolitical reasons and there is little to no geopolitical risk in the price right now," she tells me.
  • "It's hard to move prices when the prevailing sentiment is that markets are very well supplied in a number of different directions, and there is an economic malaise around expectations for oil demand growth," Ladislaw adds.
  • Yes, the sanctions are sending Gulf Coast refiners who use heavy Venezuelan oil searching for replacement barrels and that will affect pricing for specific grades. Venezuela is an important supplier, as the chart above shows.
  • But, overall, the market is absorbing the news for now.

Where it stands: U.S. production, already at record levels, continues to rise and is now approaching 12 million barrels per day. Ladislaw notes that it has consistently been beating expectations.

  • Venezuelan production has been cratering for a while, so that's somewhat baked into the cake.
  • But she points out that the landscape has changed in other ways that also temper the friction, such as: "We have already done Iran sanctions once before. There is a little bit of muscle memory in the market for dealing with an environment in which you have to find alternatives for Iranian barrels."

The latest: Via Reuters, "Oil prices steadied after two days of gains on Thursday, as lower-than-expected U.S. fuel stock rises and U.S. sanctions on Venezuelan output boosted investor confidence but U.S.-China trade tensions weighed on sentiment."

Go deeper: Unpacking Trump's Venezuelan oil move

Go deeper

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus deaths reach 4,000 per day as hospitals remain in crisis mode — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden says, "We will manage the hell out of" vaccine distribution — Biden taps ex-FDA chief to lead Operation Warp Speed amid rollout of COVID plan — Widow of GOP congressman-elect who died of COVID-19 will run to fill his seat.
  3. Vaccine: Battling Black mistrust of the vaccines"Pharmacy deserts" could become vaccine deserts — Instacart to give $25 to shoppers who get vaccine.
  4. Economy: Unemployment filings explode againFed chair: No interest rate hike coming any time soon —  Inflation rose more than expected in December.
  5. World: WHO team arrives in China to investigate pandemic origins.

NRA declares bankruptcy, says it will reincorporate in Texas

Wayne LaPierre of the National Rifle Association (NRA) speaks during CPAC in 2016. Photo: Saul Loeb/AFP via Getty Images

The National Rifle Association said Friday it has filed for Chapter 11 bankruptcy and will seek to reincorporate in Texas, calling New York, where it is currently registered, a "toxic political environment."

The big picture: The move comes just months after New York Attorney General Letitia James filed a lawsuit to dissolve the NRA, alleging the group committed fraud by diverting roughly $64 million in charitable donations over three years to support reckless spending by its executives.

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Biden: "We will manage the hell out of" vaccine distribution

Joe Biden. Photo: Chip Somodevilla / Getty Images

President-elect Joe Biden promised to invoke the Defense Production Act to increase vaccine manufacturing, as he outlined a five-point plan to administer 100 million COVID-19 vaccinations in the first months of his presidency.

Why it matters: With the Center for Disease Control and Prevention warning of a more contagious variant of the coronavirus, Biden is trying to establish how he’ll approach the pandemic differently than President Trump.