Oil markets shrug off Venezuela's chaos for now

Oil prices are basically flat Thursday after falling yesterday despite uncertainty in Venezuela and the White House endorsement of regime change against Nicolás Maduro. But, that could change if new U.S. oil sanctions arrive soon.

Why it matters: For now, the limited market response to Venezuela shows how concerns about a weakening global economy are keeping upward price pressures from the geopolitical turmoil in check.

Where it stands: This morning, WTI crude was trading around $52.22 and Brent was at $60.57.

What they're saying: “Right now, the market is kind of keyed in to growth risks stemming from U.S.-China trade talks, and a slow start out of the gate for the U.S., given the government shutdown,” Macro Risk Advisors' Chris Kettenmann told the Wall Street Journal yesterday.

But, but, but: Prices inched up earlier this morning, and one analyst tells Reuters that the prospect of U.S sanctions against Venezuelan crude exports could jolt the markets soon.

• "For now, it's not being fully priced in, but I think this does provide a new upside risk for the market," Petromatrix's Olivier Jakob said.

The intrigue: Venezuela's collapsing production in recent years has already lessened its prominence in global markets.

• But it's still a very important player for U.S. refiners who use substantial volumes of Venezuelan heavy crude.
• "Refiners in Texas and Louisiana would be hard hit by sanctions on Venezuelan crude under consideration at the White House, a move that would leave U.S. oil companies struggling to find alternative supplies," per Bloomberg.

Go deeper:

• The "tremendous opportunity" in Venezuela
• Venezuela enters uncertain new phase
• The grim list of problems Venezuela faces in Maduro's 2nd term