Oil Steadies as Global Tensions Help Offset Oversupply Outlook
Oil held gains from the past five session as escalating geopolitical tensions provide some price support to a market headed for oversupply.
Brent futures traded above $62 a barrel in thin Christmas Eve trading, up about 6% since closing at the lowest level in almost five years early last week, as the US ramps up pressure on Venezuela.
The global benchmark is still on track for its biggest annual decline since 2020, with virtually all of the world’s major oil traders foreseeing a glut next year after producers in and outside OPEC+ increased supplies. But concerns about disruptions — especially from OPEC+ members Russia and Venezuela — have helped keep a floor under prices.
The US was still in pursuit of a third oil tanker off the coast of Venezuela, though nearly half a dozen tankers laden with crude have departed from the South American nation’s coast since Washington intensified efforts to curb oil revenues that help sustain Nicolás Maduro’s regime.
Meanwhile, Russian crude is building up at sea, with the volume jumping 48% since the end of August. The US actions against Venezuela may be raising concerns among shippers and buyers of Russian barrels, who worry their cargoes could also be targeted.
In the US, an industry report showed crude stockpiles increased by 2.4 million barrels last week, with storage of gasoline and distillate both rising. Official data is set to be released on Dec. 29, rather than Wednesday, after President Donald Trump declared a federal holiday. Trading will cease early on Wednesday and markets will be closed on Thursday.
“Geopolitical premiums have yet to be digested with pretty much all the bullish factors laid out on the table,” said Gao Jian, a Shandong-based analyst at Qisheng Futures Co., referring to a flurry of tensions from Venezuela to Russia. Still, upside could be limited as the glut is expected to intensify early next year, he added.
Brent for February settlement was up 0.2% at $62.52 a barrel as of 9:50 a.m. in London.
WTI for February delivery was gained 0.3% at $58.55 a barrel.
Source : Bloomberg.com
