Oil Holds Gains With Support From Tensions in Venezuela, Russia
Oil inched higher for a second day as geopolitical risks in Venezuela and Russia offered some support to prices that have slumped on a bearish oversupply outlook.
Brent crude initially rose toward $61 a barrel, extending a 1.3% increase on Wednesday, but then pared most gains in a choppy session. In an address from the White House, US President Donald Trump refrained from mentioning developments in Venezuela, which currently accounts for less than 1% of world supplies.
The US is also preparing a fresh round of sanctions on Russia’s energy sector, a reminder that an end to the war in Ukraine is far from certain. But, so far measures against Moscow haven’t significantly moved the needle in the oil market.
Oil is still on track for a yearly loss of about a fifth as global supply eclipses demand, with US futures hitting the lowest since 2021 earlier this week before the spike in tensions pushed prices higher. Market metrics from the Middle East to the US have been flashing signs of underlying weakness.
“The rally was disappointing given the magnitude of the escalation happening in Venezuela and Russia,” said Keshav Lohiya, founder of consultant HiLo Analytics. “For Venezuela, the question remains how effective this blockade will be, given any disruption in Venezuelan oil exports will predominantly hurt Chinese refiners.”
Activity has thinned in the run-up to next week’s Christmas break, with the aggregate volume of Brent contracts traded on Thursday below the daily average. That could amplify price moves, lifting volatility.
In Venezuela, oil-storage facilities and tankers at its terminals are quickly filling up, according to people familiar with the situation. If they reach maximum capacity, state-owned Petróleos de Venezuela SA could be forced to shut-in wells.
Brent for February settlement edged up 0.3% to $59.85 a barrel at 10:30 a.m. in London.
WTI for January delivery added 0.5% to $56.22 a barrel.
Source : Bloomberg.com
