Oil prices drop amid hopes for Venezuela supply

NEW YORK, May 17 (Xinhua) -- Oil prices fell on Tuesday as the United States moved to ease some sanctions against Venezuela.

The West Texas Intermediate for June delivery lost 1.8 U.S. dollars, or 1.6 percent, to settle at 112.40 dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery decreased 2.31 dollars, or 2 percent, to close at 111.93 dollars a barrel on the London ICE Futures Exchange.

The United States will ease some sanctions against Venezuela as a means to encourage negotiations between the U.S.-backed opposition and the Venezuelan government led by President Nicolas Maduro, senior administration officials announced Tuesday.

Part of the sanctions relief involved the issuance by the U.S. Treasury Department of a "narrow license" authorizing Chevron Corp., the last major U.S. oil company still operating in Venezuela, to negotiate "potential future activities" in the Latin American country, the officials told reporters during a briefing, speaking on the condition of anonymity under ground rules set by the White House.

The news came at a time when market participants were worried about tight supplies as the European Union worked on gaining support for an oil embargo against Russia.

Traders were also awaiting data on U.S. crude stockpiles as the U.S. Energy Information Administration is set to release its weekly petroleum status report on Wednesday. Analysts surveyed by S&P Global Commodity Insights expect the EIA publications to show a 2.1 million barrel rise in oil inventories.

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