Oil Swings in Thin Trading, US Pressure on Venezuela Exports
Oil swung in thin trading as the market weighed the US clampdown on shipments from Venezuela against weak demand.
West Texas Intermediate edged higher to trade near $58 a barrel, on track for a five-day winning streak, while Brent was close to $62. The US has boarded one tanker, seized another and recently pursued a third near Venezuela, as Washington piles pressure on the government of Nicolas Maduro. Still, more than a dozen vessels have loaded oil off the country’s coast since the Trump administration intensified efforts to curb Caracas’ crude revenue.
Volumes are trending lower ahead of the December holidays, with many traders away, contributing to exaggerated price swings.
Trump has said the US will keep the oil from the seized tanker. Venezuelan exports represent less than 1% of global supply, but the revenue provides a financial lifeline for Maduro’s government, which has called the US actions piracy.
Geopolitical stresses, including the threat of US land strikes against alleged drug operations in Latin America and the ongoing war in Ukraine, have helped arrest a slide in oil prices that has been underway since mid-June. WTI is down roughly 19% this year, heading for the biggest annual drop since 2020, as increasing supply outpaces demand.
“Price action looks increasingly prone to short-lived spikes rather than a sustained move higher,” said Rebecca Reed-Sperrin, a broker at SCB Group and former derivatives broking desk head at Braemar. “Even a sharp near-term drop in Venezuelan exports would still leave the market comfortably supplied into the first half of next year.”
Meanwhile, a cargo of Russian crude from US-sanctioned Rosneft PJSC has finally been delivered to a Chinese oil terminal after spending three months at sea, ship-tracking data show.
WTI for February delivery edged up 0.293% to $58.18 a barrel as of 12:12 p.m. in New York. Brent for February settlement crept 0.242% higher to $62.22 a barrel.
Source : Bloomberg.com
