Oil Holds Four-Day Gain, Focus on US Blockade of Venezuela
Oil prices held on to four consecutive days of gains as the US continued its blockade of oil shipments from Venezuela. In this morning's trading, West Texas Intermediate (WTI) was trading around $58 per barrel, after rising about 5% in the last four sessions, while Brent closed near $62 per barrel.
US President Donald Trump confirmed that the US would continue to withhold oil from seized vessels linked to Venezuela. The US has already seized two oil tankers and is pursuing a third, as part of further pressure on the government of Nicolás Maduro.
Despite the ship seizures, more than a dozen tankers are still transporting oil off the Venezuelan coast since the US administration stepped up its efforts to reduce Caracas' oil revenues. This suggests that despite the tightening efforts, Venezuela's oil supply is still operating, albeit limited.
Geopolitical tensions, including the threat of a US ground offensive against drug trafficking operations in Latin America, are also supporting oil prices. The rise in oil prices comes despite a nearly 20% decline so far this year, with supply increasing much faster than demand growth, leading to a market glut.
However, despite the recent rise in oil prices, the market remains plagued by concerns about declining demand due to a slowing global economy and political uncertainty.
Early in Singapore, WTI for February delivery fell slightly by 0.2% to $57.87 per barrel. Brent for February settlement closed 2.7% higher at $62.07 per barrel on Monday.
Nevertheless, the oil market remains heavily influenced by geopolitical developments, particularly those related to Venezuela and U.S. policy plans, which will continue to be important factors in oil price movements in the coming months. (asd)
Source: Bloomberg.com
